Proprietorship firm and applicable tax, employees

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This query is : Resolved

Trader Learn (Querist)

05 May 2021 Hi,

I am resident of India and having my own proprietorship firm. The firm is registered and as a trade name and also GST# is obtained.

The proprietorship firm is registered to provide software/hardware consultancy. Currently I have a client who is US based. For this company I provide the consultancy and they would pay to my India account opened in the proprietorship firm.

Currently I am alone managing it but due to the work load and getting into contract with few other companies as well so I am planning to hire few employee/freelancers may be around 3 members. So I have some queries and need to know the process for the firm to follow

1. If I hire someone as employee do I have to issue offer letter and CTC details
2. Should I deduct the Tax, if the total payment for person in a year may exceed 10lac. What is the minimum wages ?
3. If I hire them as consultant should I still deduct TDS
4. Do I required TAN and legal process to follow
5. How do I pay them monthly ? can I use my firm account to pay them and show under the expenses ?

Please help

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 May 2021 1 Give simple appointment letter no need for CTC.
2 TDS oñ salary applicable if payment exceed 5 lacs.
3 TDS applicable only if Tax audit applicable to you.
4 Yes TAN required.
5 Yes you can do so.

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