Tds on retainership
This query is : Resolved
16 August 2014
1) IF AN EMPLOYEE TAKEN VRS AND DOING SAME JOB (eg. Cooking, Weighbridge Operator, Work in Accounts, Logistics Department) IN SAME COMPANY ON CONTRACT BASIS. THEN UNDER WHICH SECTION THE TDS SHOULD BE DEDUCTED ON PAYMENT TO HIM ????
16 August 2014
in my opinion when employee make VRS then he cannot do any job in same management company.
16 August 2014
he is doing job as salary then tds will deducted u/s 192
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16 August 2014
TDS u/s 192
21 August 2014
Sir,
Ok. infact my query is whether it is retired / left employee or any individual, if a person giving services of Cook, Weigh bridge operator and working in accounts and logistics department (not on payroll but on invoice basis) then under which section tds would be deducted on his/her payment.
Ok. infact my query is whether it is retired / left employee or any individual, if a person giving services of Cook, Weigh bridge operator and working in accounts and logistics department (not on payroll but on invoice basis) then under which section tds would be deducted on his/her payment.
21 August 2014
it is a labour contract comes under 194C
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22 August 2014
Need some more suggestion with Income Tax Provision / Clause... please
27 July 2025
Got it! Here’s a clear breakdown for **TDS on retainership/payment to ex-employee now working on contract basis** for services like cooking, weighbridge operation, accounts, logistics:
---
### Situation:
* An employee has taken VRS (Voluntary Retirement Scheme).
* Now, the same person is providing services **on contract basis** (not on payroll).
* Services include: cooking, weighbridge operator, accounts work, logistics.
* Payments are made against invoices (not salary).
---
### Applicable TDS Section:
* **Since payment is for services rendered on contract basis (not salary), TDS will be under:**
**Section 194C – TDS on Payment to Contractors**
* This section applies when payments are made for carrying out any work (including supply of labor for carrying out any work).
* Services like cooking, weighbridge operation, or logistics provided on contract basis fall under “work” and hence 194C applies.
* If the person is providing **professional or technical services** (like accounts consulting), then **Section 194J** may apply.
---
### Key points:
* If services are manual labor, or similar, then 194C applies.
* If services are professional (consulting, legal, technical), then 194J applies.
* If it was salary payment, then 192 applies, but since the person is now a contractor (invoice-based), it is 194C or 194J.
* Threshold limits apply (payments exceeding Rs. 30,000 per transaction or Rs. 1,00,000 per year for 194C).
---
### Example:
* Payment to cook (contract basis): TDS u/s 194C.
* Payment to accounts consultant (if invoice issued for professional services): TDS u/s 194J.
---
Let me know if you want me to pull out exact legal text or notification references for this!
---
### Situation:
* An employee has taken VRS (Voluntary Retirement Scheme).
* Now, the same person is providing services **on contract basis** (not on payroll).
* Services include: cooking, weighbridge operator, accounts work, logistics.
* Payments are made against invoices (not salary).
---
### Applicable TDS Section:
* **Since payment is for services rendered on contract basis (not salary), TDS will be under:**
**Section 194C – TDS on Payment to Contractors**
* This section applies when payments are made for carrying out any work (including supply of labor for carrying out any work).
* Services like cooking, weighbridge operation, or logistics provided on contract basis fall under “work” and hence 194C applies.
* If the person is providing **professional or technical services** (like accounts consulting), then **Section 194J** may apply.
---
### Key points:
* If services are manual labor, or similar, then 194C applies.
* If services are professional (consulting, legal, technical), then 194J applies.
* If it was salary payment, then 192 applies, but since the person is now a contractor (invoice-based), it is 194C or 194J.
* Threshold limits apply (payments exceeding Rs. 30,000 per transaction or Rs. 1,00,000 per year for 194C).
---
### Example:
* Payment to cook (contract basis): TDS u/s 194C.
* Payment to accounts consultant (if invoice issued for professional services): TDS u/s 194J.
---
Let me know if you want me to pull out exact legal text or notification references for this!
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