Professional fees to an employee

AND YA THE QUESTION IS BEING ASKED REGARDING TDS NOT ABOUT THE NOMENCLATURE...SPECIFIC SECTION ALWAYS PREFFERED OVER GENERAL SECTION

Dear Sripal,

I have gone through the case CIT V.S GOVIND SWAMINATHAN(1998)233, I would like to bring out some of the fact of case which says clearly that the assessee whos is an Advocate-General is never treated to be servicing as an employee and the relationship of employer and employee is not there. The amount paid to him was in the nature of retainership which i have already suggested is the one route to make payment and when there is no employee employer relation in the given case how can it be treated as salary.

"""the relationship between the Advocate-General and the State Government is not that of a master and servant relationship and he is not holding the post under the State The amount was paid only as a retainer fee by the State Government to retain the services of the Advocate-General The assessee was not given the post for any particular service, but the amount was paid only for the services to be rendered as a professional advocate"""

Regards

CA AMIT MEHTA

im not very sure...i think u might be right but then i want to check out others opinion ..hope u dont mind

regards

sripal

Dear Sripal,

Yes the qus was for TDS but when you are treating the payment as professional income then the TDS has to be deducted u/s 194J whereas if the payment if treated as salary TDS will be deducted u/192.

So it has to be first decided whether the payment to be made will be treated as salary or professional fees.

Regards

CA Amit Mehta

Dear Sripal,

I am sure that we can make payment either as salary or as professional fees and even i am looking forward to see others members opinion.

Regards

CA AMIT MEHTA

gfHi..........................,

1.       If payment done as professional then TDS rate 10% and no tax deduction e..g 80C and other will apply at the time of calculating tax,  but at time filling personal ITR employee can take exemption/deduction benefit and can showing in ITR for refunding   extra deducted tax if any.

2.       If payment done under “salaries” head then tax to be calculate as per slab and he/she can take exemption and deduction benefits. 

T

Now that it is creating so much confusion .. lets look at practically.. Since we have difference of opinion .. Dept will also have such difference of opinion.. SO i feel it would be safer if 10% is deducted.. ANyways the deductee will get credit for it.. and dept wont come out with Show Cause Notice also.. (Worst case scenario)

I m in payroll field, anybody can put this in ajityadav121 @ gmail.com for futher clarification

thanx

Ajit

Dear Ajit,

I am very sure and there is no confusion on my part. Please go through the whole discussion.

Have you ever seen such practices.

Regards

CA Amit Mehta

Dear Ajit,

The discussion is about whether we can payment salary as well as Professional fees to an employee???

Further facts are invited from members.

Regards

CA Amit Mehta

Hi,

Professional fees should be paid to a professional in practice only and salary to an employee. Hence no we cannot pay both at the same time.

Thanks.

lol... i think people have not understood the question..i cal for an EXPERT opinion on this..plzz clubindia moderators post this on expert query