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Income tax

14 March 2014

Hi,

I am writing this for my spouse. She is working in a Central Govt. School as a Teacher on Contract basis. Is she liable to pay Income Tax if here income is below 2,00,000 in a financial Year.

Also could you please help me understand the Payments to contractor - Section 194C.

If she liable to pay IT, why she is liable to pay even if the income is below the base limit?

Thanks,

Shibin Varghese

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5 Replies

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 14 March 2014

Dear shibin if your wife income is below rs. 2lakhs then no need to deduct tax oh her income.(if she is getting the amount as salary income and according to my experience it should come under head salary). under 194c tds is deducted on contractors if annual payment to them is more than 75000 or single payment is more than 30000. I hope my answer is clear to you. Regards

1 Like

CA Nitin K. Varshney (FCA DISA CCA Peer Reviewer (ICAI)) (606 Points)
Replied 14 March 2014

As per my view, this income is taxable under the head salary and no TDS should be deducted in this case. As you said she is appointed on contract basis but the amount is paid as salary.

1 Like

Mihir (Wealth Manager) (5293 Points)
Replied 15 March 2014

Check her 26AS.

1 Like

Anubhav (Student) (589 Points)
Replied 15 March 2014

If tds has been deducted, you have to file return to claim refund. 26 AS will be helpful in that case.

1 Like

RAHUL GOYAL (tax consultant) (46 Points)
Replied 18 March 2014

Dear Shibin....if the income of your wife is taxable under the head Salary.....then no TDS would be deducted on that income...as your wife's income is less than Rs 200000.....so she is not liable for paying any income tax in this financial year.....But there must exist Employer Employee relationship between govt. school and your wife for taxability under the head salary.....(See offer letter received by your wife)....Is she receiving Form 16?

Now come to section 194C.....TDS on Contract.....Under this section,Tds is required to be deducted if amount paid to the contractor exceeding Rs 75000 in a financial year OR exceeding Rs 30000 for a single bill....Rate of TDS will be....1% of the amount payable(if contractor is an Individual OR HUF)...2% of the amount payable(if contractor is other than Individual or HUF).....