Tds deduction bracket for contract employees.
This query is : Resolved
16 February 2018
SIR,
I HAVE A QUERY IF YOU PEOPLE CAN HELP ME OUT. MY WIFE IS A CONTRACT EMPLOYEE (TEACHER) OF A SCHOOL, SHE EARNS 15K PER MONTH THUS HER ANNUAL INCOME WOULD BE 1,80,000. THE ACCOUNT DEPT SAYS THAT FOR CONTRACT EMPLOYEES TDS DEDUCTION IS DONE FOR PEOPLE EARNING MORE THAN 1,00,000 AND NOT 2,50,000. IS IT TRUE?
I HAVE A QUERY IF YOU PEOPLE CAN HELP ME OUT. MY WIFE IS A CONTRACT EMPLOYEE (TEACHER) OF A SCHOOL, SHE EARNS 15K PER MONTH THUS HER ANNUAL INCOME WOULD BE 1,80,000. THE ACCOUNT DEPT SAYS THAT FOR CONTRACT EMPLOYEES TDS DEDUCTION IS DONE FOR PEOPLE EARNING MORE THAN 1,00,000 AND NOT 2,50,000. IS IT TRUE?
CA R SEETHARAMAN
(Expert)
16 February 2018
Payment to contract employee should be considered as salary payment and TDS to be deducted only when payment exceed 2.50 lacs
16 February 2018
TDS should not be deducted in your case.
Salary paid by company to contracted employees who worked under its control and management and whose salary was charge on its profits, did not constitute payment made for works contract coming under section 194C and, thus, company is not liable to deduct tax at source while making said payment if the said payment does not exceed Rs. 2.5 lacs.
Salary paid by company to contracted employees who worked under its control and management and whose salary was charge on its profits, did not constitute payment made for works contract coming under section 194C and, thus, company is not liable to deduct tax at source while making said payment if the said payment does not exceed Rs. 2.5 lacs.
16 February 2018
Thank you so much sir. But these account people showed me something in which they are saying that its a different case for the contract employee. What should I show them? Are there any different rules for contract people?
CA R SEETHARAMAN
(Expert)
16 February 2018
Terms of employment is contract but payment is only salary.
16 February 2018
You can show him the case law Bhagyanagar Gas Ltd. v. Assistant Commissioner of Income-tax, Circle 1(3), Hyderabad
It clearly state the facts that Seetharaman Sir or I have mentioned above
It clearly state the facts that Seetharaman Sir or I have mentioned above
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- EPF ECR NEW FILE SEP 17TH 2026
- SECTION 393(3) TAX ON CASH WITHDRAWAL
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- TDS on Fixed Assets purchased
- Capitalgain tax purposes for valuation report compulsory
- Non filing of I T Returns
- Oct 2025 Invoices
- Import of Software Service.
- Clarification Requested: Gift → NRO → NRE → Overseas Transfer - USA/CANDA (FEMA & Tax Compliance)
- How to Handle Active E-Invoices in GST Portal Deleted from Tally?
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
