Payments from llp to individuals, tds or service tax?

Vickie (CA Job) (31 Points)

09 April 2014  

Hi Everybody:

We have a client that is into medical transcripttion.  It is an LLP.  The LLP gives out work to individuals who work from home, all within India only.  The individuals are paid according to per line typed basis, so the payment varies every month, not a fixed salary.  How should the payment be treated? As salary or payment for independent contractors? Does this payment attract service tax? Or is TDS applicable in these cases?  Please advise.

Thanks in advance.