Stiphend - TDS

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2011 If any temporary secretary who has been paid Rs 30,000 p.m has a stiphend for the month of Apr & May 2011 on which no tds has been deducted b,coz she is on contract upto June 2011 and below the taxable limit . If the company wants to pay here special allowance of Rs 30,000 whether we have to deduct TDS on this or not, If yes, then from Apr to June 2011. Her total income from Apr to June 2011 will be Rs 90,000 plus Rs 30,000 as special allowance. Therefore her total income during the period will be Rs 1,20,000 which is below the limit.

If the same trainee will be appointed as an employee from Jul-2011 in the same company.

Please suggest

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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27 June 2011 If the things and intentions are predetermined it is advisable to deduct TDS as the terms of contract or service agreement are guiding so.

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On the basis of her annual salary monthly average TDS may be found and paid.

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You may deduct TDS of the last 4 months on the entire amount paid to her so that her take home salary can be maintained.
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In case there is no agreement to retain her after completion of her training period , TDS requirement does not arise in case she has been termed as an employee in the documents.

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