Recently one of the Universities has started deudcting tax on renumeration pay-outs to teachers for correcting answer scriptts. They pay Rs 20 per paper. Generally payments are less than 2000. The teachers are employees of affiliated colleges, but not of university itself. The payments are done in cash. There is no commitment to give TDS certificates.
Considering the amount is small, is it legal for University to deduct income tax. Under what section it will fall ?
Are they bound to give a TDS Certificate/Form 16A and will individual transactions get reflected in Form 26AS.
Their stand is that the bulk amount of pay-outs to teachers attract tax and they can deduct it before payment.
Does this fall under income tax or service tax deduction?
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