Income Tax Category

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sai

71 Points Posted on 14 March 2021

Greetings !

My query was regarding to know about my category under which I can pay tax.

I was working for a client company on remote location through a consultancy since May 2020.

I am a professional but my salary varies monthly i.e., depends on no.of hours worked. The payment will be calculated on total no.of hours worked in that month multiplied by hourly rate.

1. Will I come under salaried or freelancer ?

In the current financial year (May 2020 to Feb 2021), I was paid around Rs. 6 lakhs. My employer was deducting 1 % of monthly income as TDS.

2. Will I have to pay any advance tax? If so, Please suggest the process.

I was investing in stock market since few months.

3. How to segregate and calculate my STCG out of all my transactions ?

4. Under which section I have to file the tax and dates for the same ?

Kindly help me in clarifying my queries as I have no prior knowledge in taxation. (This was my first time paying tax).

Thanks & Regards.

Replies (2)

Quick Summary

This discussion explores an individual's income tax category, questioning whether their consultancy income, paid on an hourly basis with variable monthly payments and 1% TDS under Section 194C, classifies them as salaried or a freelancer. The conversation touches upon the applicability of advance tax if total tax payable exceeds £10,000, the calculation of short-term capital gains (STCG) from stock market investments, and the correct sections and deadlines for filing tax returns. The respondent clarifies that 1% TDS under 194C suggests contractor status, not salary, and mentions a potential 50% expense deduction for contractors, leading to the employer's assertion that no tax is due based on the net income.

Sandeep shetty

Sr Accountant

185 Points Posted on 15 March 2021

Hi,

As per your question you are an professional working as a consultant and your employer deducting 1% TDS will not be considered as salary (as per my view if payment is in the nature of professional fee TDS has to be deducted 10% ,7.5% for current Financial Year )

Please clarify your nature of consultancy work and is there any agreements to supporting it

If your total tax payable in a financial year is Rs. 10000 or more, then you have to pay advance tax

July 31: This is the last date to file income tax return for those taxpayers whose accounts are not required to be audited

sai

71 Points Posted on 31 March 2021

Hi,

My 1% TDS deduction was shown under section 194C.

I asked my employer about advance tax and then they said ;

The nature of work was shown under contractor like that. So, for this one can get directly 50 % of income as exceptions. As my cumulative salary till Feb was 7 lakhs, they said I don't need to pay any tax. (3.5 lakhs as my net income).

Is this right ?