Salary to workers

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This discussion explores TDS (Tax Deducted at Source) implications when paying a supervisor who then disburses wages to workers based on production. The core question is whether the primary employer has a TDS liability on payments made to the supervisor. The advice suggests that TDS under Section 192 might be applicable if the supervisor is treated as an employee. However, if the supervisor is providing a service of arranging labour, TDS under Section 194C is more likely. The current payment structure is deemed tax and compliance inefficient, with recommendations for clearer contractual arrangements.

jayesh khokhariya

jayesh khokhariya (Querist)

22 February 2025 we are paying salary to worker around 2 crore for that we have hired one supervisor for arrangement of worker we are paying amount to that supervisor and supervisor paying that amount to different different worker on monthly basis as per their respective work. and we are also paying salary to that supervisor for worker arrangement.

Question is whether tds liability will arise on us for paying amount to supervisor ? if arise than under which section??

Nikhil Kaushik

Nikhil Kaushik (Expert)

22 February 2025 what is your contract with the supervisor?

jayesh khokhariya

jayesh khokhariya (Querist)

23 February 2025 supervisor have to make an arrangement for worker a per production requirement, we are paying fix salary to that supervisor and we are paying to that supervisor for all worker on production basis per piece rate. than that supervisor will pay that amount to all worker as per their work

Nikhil Kaushik

Nikhil Kaushik (Expert)

23 February 2025 well, then you need to deduct TDS under 192. The supervisor will have to deduct TDS based on his contract with the workers - either under 194C or 192.

Ideally you should be paying the supervisor payment under 194C. otherwise, it is a very tax and compliance inefficient model

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