TDS/Service tax on contract job
This query is : Resolved
22 July 2011
Dear All,
Please help me with the following query:
My wife works with a company on contract from home. Whenever there is some work they will call her and give the details of work. There may not be any work in some months and in some months she earns 15-20K. The work is related to arranging interviews etc. The company is deducting 10% TDS on the payment.
Questions:
1. Since my wife doesn't have ny other source of income and this income in under expemtion limit, can she give form 15G to avoid TDS? Please provide relevant sections/link if any to refer.
2. Does she need to charge service tax on her bills? If yes, does she need any registration for service tax? Does she need to pay this service tax back to govt?
Thanks,
Ashu
Please help me with the following query:
My wife works with a company on contract from home. Whenever there is some work they will call her and give the details of work. There may not be any work in some months and in some months she earns 15-20K. The work is related to arranging interviews etc. The company is deducting 10% TDS on the payment.
Questions:
1. Since my wife doesn't have ny other source of income and this income in under expemtion limit, can she give form 15G to avoid TDS? Please provide relevant sections/link if any to refer.
2. Does she need to charge service tax on her bills? If yes, does she need any registration for service tax? Does she need to pay this service tax back to govt?
Thanks,
Ashu
25 July 2011
Dear Friends,
Please reply. I need the answer at the earliest.
Thanks,
Ashu
Please reply. I need the answer at the earliest.
Thanks,
Ashu
28 July 2025
Hey Ashu! Here’s a detailed answer to your wife’s situation about **TDS and Service Tax on contract income**:
---
### 1. **Can she submit Form 15G to avoid TDS?**
* **Form 15G** is a declaration to avoid TDS on **interest income** or other **specified incomes** under certain sections like 194A.
* For **professional or contractual income**, **Form 15G is NOT applicable**.
* Since the company is deducting **TDS under Section 194C (contractual payments) or 194J (professional fees)**, Form 15G cannot be submitted to avoid TDS.
* If her **total income is below the taxable limit**, she can **claim refund of excess TDS while filing income tax return**.
**References:**
* Section 194C (Payment to contractors)
* Section 194J (Fees for professional services)
---
### 2. **Does she need to charge Service Tax on her bills?**
* Service Tax (before GST) was applicable on **services provided**, with certain thresholds.
* If her **annual turnover from such services exceeds Rs. 10 lakhs (Service Tax threshold before GST)**, she **must register for Service Tax** and charge Service Tax (currently GST applies instead).
* For smaller turnover ( Rs. 10 lakh (pre-GST); otherwise not. |
| **Charging service tax** | Yes, if registered; otherwise no. |
---
If she expects her contract income to remain low, she does not need to worry about service tax registration or payment.
If you want, I can also explain about GST implications post service tax regime, as GST replaced Service Tax since 2017. Would you like that?
---
### 1. **Can she submit Form 15G to avoid TDS?**
* **Form 15G** is a declaration to avoid TDS on **interest income** or other **specified incomes** under certain sections like 194A.
* For **professional or contractual income**, **Form 15G is NOT applicable**.
* Since the company is deducting **TDS under Section 194C (contractual payments) or 194J (professional fees)**, Form 15G cannot be submitted to avoid TDS.
* If her **total income is below the taxable limit**, she can **claim refund of excess TDS while filing income tax return**.
**References:**
* Section 194C (Payment to contractors)
* Section 194J (Fees for professional services)
---
### 2. **Does she need to charge Service Tax on her bills?**
* Service Tax (before GST) was applicable on **services provided**, with certain thresholds.
* If her **annual turnover from such services exceeds Rs. 10 lakhs (Service Tax threshold before GST)**, she **must register for Service Tax** and charge Service Tax (currently GST applies instead).
* For smaller turnover ( Rs. 10 lakh (pre-GST); otherwise not. |
| **Charging service tax** | Yes, if registered; otherwise no. |
---
If she expects her contract income to remain low, she does not need to worry about service tax registration or payment.
If you want, I can also explain about GST implications post service tax regime, as GST replaced Service Tax since 2017. Would you like that?
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