Tds on wages

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Bilal Chauhan (Querist)
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09 September 2011 Dear experts,
My client is a manufacturing concern. They pay remuneration to workers for various manufacturing processes in the name of "WAGES". The payments are made on PIECE RATE BASIS on not on timely basis. However, the workers just provide the labour, no material is introduced by them neither any machine is owned by them. These wages comprise a considerable part of manufacturing expenses. Sir, please guide me that just because the payments are made on PIECE rate basis, will these payments will be considered as contractual payment under the purview of Sec 194C or will it be considered as wages under Sec 192? Kindly provide detailed explanation & references where ever required.

CMA Ashutosh Kumar Gupta

CMA Ashutosh Kumar Gupta (Expert)
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09 September 2011 Pl. check the T&C and agreement of the employment of such workers.
Per the details provided by you, it appears these are the workers not 'on roll' of the company/enterprise hence salary income case u/s 192 does not seem to appear.
Therefore, appear to be contractual labours and accordingly TDS on contractual obligation seems to arise.
Others' views may also be solicited, query status kept now as open.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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09 September 2011 if they are employed in company then its under salary & Wages.

if they are not in roll of company then contractual nature.

Bilal Chauhan

Bilal Chauhan (Querist)
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12 September 2011 Sirs,
My client maintains an employee register duly & pays profession tax & other statutory obligations (on employment). Just the wage structure is different (piece rate instead of time rate). Please put some light on the "on roll" suggestion made by you.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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12 September 2011 Its called Salary & Wages now go ahead

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