Tds - at what % - Income Tax

Yogesh Bhandari (CA FINAL Student) (429 Points)
Replied 30 December 2011

I feel that he treated as an employee so TDS should be deducted at the normal slab rate of tax applicable to an individual.

Yogesh Bhandari (CA FINAL Student) (429 Points)
Replied 30 December 2011

I feel that he treated as an employee so TDS should be deducted at the normal slab rate of tax applicable to an individual.

1 Like

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 30 December 2011

From the facts given my view is as the person is not providing any professional or technical service, you can deduct tax at 1% under 194C.

1 Like

Yogesh Bhandari (CA FINAL Student) (429 Points)
Replied 30 December 2011

I think in this case there exists the relationship of an employer and an employee between the payer and the payee . Consider the following examples to understand:
(a) Sujatha, an actress, is employed in Chopra Films, where she is paid a monthly remuneration of Rs.2 lakh. She acts in various films produced by various producers. The remuneration for acting in such films is directly paid to Chopra Films by the different producers. In this case, Rs.2 lakh will constitute salary in the hands of Sujatha, since the relationship of employer and employee exists between Chopra Films and Sujatha.
(b) In the above example, if Sujatha acts in various films and gets fees from different producers, the same income will be chargeable as income from profession since the relationship of employer and employee does not exist between Sujatha and the film producers.

1 Like

Venkat (Dy. Manager Finance) (272 Points)
Replied 30 December 2011

Dear Yogesh Bhandari,

Thank you very much for your response,

Bt in our case, I beleive/guess there is no employer - employee relationship.

In simple terms we requested a person to do the follow services - then at wat rate we have to deduct TDS ?, as of now we are deduction 10% U/S 194J.

1).Taking care of Repair and maitainence of Containers at Yard.

2). Giving brief details about containers to client - for the client visit to Yard.

3). Inspection of the containers after the repairs done to containers.

Pls advise the options to deduct less TDS as dat the person (we requested to the above services) will be benefited.

Yogesh Bhandari (CA FINAL Student) (429 Points)
Replied 30 December 2011

if there is no employer - employee relationship, then from your case facts, my view is as the person is not providing any professional or technical service, you can deduct tax at 1% under 194C.

Parashar (Company Secretary 2004) (1013 Points)
Replied 30 December 2011

TDS Should be deducted u/s 194C as the situation suggets the relationship of contractor.

Venkat (Dy. Manager Finance) (272 Points)
Replied 30 December 2011

Dear All,

Thanks for the response,

If we can deduct TDS at 1% u/s 194C - wat is the basis points (legal) in Sec 194C so dat we can make it as a base support for further discussion wit I.T dept.

IMP Note :- We make payment monthly is it ok ? I mean is there any restriction U/S 194C for making payment monthly.

madhur gupta (student/article ) (1022 Points)
Replied 30 December 2011

I think you need not to go for sec.194 C

You are paying monthly fees

Just issue form 16.at end of year and enter his name on employee register.In this your all legal obligations related to TDS will be met automatically.

SUNIL (ACCOUTANT) (167 Points)
Replied 30 December 2011

Tds is under section 194 c

CA Kiran Sutrave (CA) (428 Points)
Replied 30 December 2011

Dear Venkat

I think you should take that person on the payroll of your Company.

If that is not possible, then prepare a Professional Service Contract with that person and deduct TDS @ 10% under Section 194J since he is providing services of Professional nature.

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 31 December 2011

if there is a contract then deduct tax as per section 194C and if not then as per section 194J

Shivank Khanna (B.Com CA Final) (162 Points)
Replied 31 December 2011

There exists employer - employee relationship between the Company And person employed by it at Mumbai Port. Tds will be deducted as it is normally done in case of employee u/s 192.

CA Kiran Sutrave (CA) (428 Points)
Replied 31 December 2011

Dear Siddharth

If there is a Contract with a CA then whether TDS is to be deducted under section 194C or 194J?

A Contract does not itself satisfies the condition for deducting TDS u/s 194C what is important is the services that will be provided in the Contract and in the given scenario, the person is giving certain services which is professional in nature and hence TDS is to be deducted u/s 194J.

Correct me if I am wrong. Suggestions are always welcome.