25 January 2010
Kindly clarify i am earning monthly 150000/- salary from my salary deducting 30 % TDs. For consultant tax rate 10% Which one better for me as being consultant or salary hoder for tax saving please clarify in details urgently
25 January 2010
If you are drawing Rs. 10,000/- per month then the yearly total will be Rs. 120,000/- which is clearly below the basic exemption limit of Rs. 160,000/- and so no TDS should be deducted on the same and the better option would be salary only.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
25 January 2010
sorry for u interpreting actually my montly salary is 150000 not 10000
25 January 2010
As per your query you early receipts will be Rs. 18,00,000/-. So if you draw professional receipts TDS deduction will be @ 10% i. e. Rs. 180,000/- as compared to currently being taxed at slab rates without any deduction for expenses incurred.
So it will be beneficial if you show professional receipts and then show some expenses and get deduction for the same.
However if you do that then firstly you will have to apply for service tax registration as the gross receipts will exceed Rs. 10,00,000. So the company paying you cost will increase if the company is not taking cenvat credit.
25 January 2010
So if you are able to do all the work such as maintain books of accounts, register for service tax, pay service tax quartely and get you books of accounts audited u/s 44AB then go for consultancy fees as you end up paying less taxes otherwise salary income.
So tax savings will be huge in consultant than in salary but there will also be a cost for it which would be less than the tax savings.
CAclubindia
