Hi! I have got a query regarding Salary Vs Professional fees- what should be opted?
I have got a friend who is a dentist and his monthly income is 70k. he has joined a private hospital where he is been paid like that. The hospital owner is depositing 70 k per month in his bank account. now being asked about form 16 he is saying we are treating you as a professional and cant reduce the TDS and give you the remaining january, feb and march month salary. we will pay you full 70k for the remaining months. His only saving is as PPF account and 1.5 lacs. He doesn't have his CA. So he is consulting me what should be the best way for him?
should he accpet it as professional fee or force them to give form 16 a and deduction of 29333 rupees for rest of the 3 months considering the calculation of 70000x12=8,40,000-1,50,000(PPF investment)=6,90,000-250000(tax slab)=4,40,000 so 20% tax slab = 88,000 to be deducted in the remaining 3 months so 88000/3= 29333 rupess each month for january, february and march.
kindly guide me in details, thank you in advance.
CAclubindia
