Tds on salaries / payment to contractors - clarfication reqd

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Vijaya Kumar K S (Querist)
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21 April 2016 Sir,

In an govt organization directly appointment Asst.Engg for one year contract with written agreement.After 1 Year they will be renewed with some % of hike with new agreement for 1year. At the time of paying Monthly remuneration, the govt organization deduct professional tax & remitted to PT- Office every month (Under Form 5A as per PT-Karnataka Act)

My Question is :
1. For Income tax Calculation What we considered as 194C Or 194J Or a Income from Salary -192B

Please clarify the same....

Amol S Joglekar

Amol S Joglekar (Expert)
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21 April 2016 It is definitely a GRAY area, especially so when "contractual salary" has become the key word of the today's world.
In our country, when ever the question of TDS comes, the deductee is reluctant to go for it. So obviously, the deductee will try to argue that TDS be done at lower of all like 192 or 194C or 194J,
The decision has to be taken with respect to the situation. 194C is far away from reality in such cases but 192 and/or 194J is a tricky matter.
(Just to add your inqusitiveness in this regard....... at Delhi I came across with a section of contract employee (in a WB aided project) who feel that if 194J is made applicable, they will also be required to pay SERVICE TAX.....(In most of the cases the yearly salary is above 10 lakh)

Your views please

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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21 April 2016 It is contractual employment with designation of Asst Engg and monthly remuneration is paid so TDS applicable u/s 192B.

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