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Tax for consultants vis-a-vis full time employee
Hey there CA gurus - I need your advice with something here. I'm in discussion with a startup and we are trying to make sure that I get the maximum take home. In the discussion we thought of having me as consultant instead of a full time employee. I believe if you're a consultant you're applicable for only TDS and not income tax. Is that correct? What are your suggestions on this how to get the maximum take home. Second question, will being a consultant affect the transfer of ESOPs? Please suggest.
Thanks in advance
Prabhat
Replies (1)
Anyone who earns an income (and in some cases even if not), is liable to pay income tax.
TDS is just another way of paying income tax. So, if you are getting certain amount of income, you'll have to pay income tax on it, irrespective of the nomenclature.
However, if you'll claim it as professional income, you may get advantage of deducting expenses out of it, which is not possible in case of salary income.
Further, you should consider restructuring your package as to get maximum tax benefit, in case you want to get it as salary.
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