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Tds on retired employees

Rahul Kishor Dayama (Practice) (40 Points)

05 June 2016

Dear all,

Please guide me on the below mentioned question.

If the employee retires from the company and reinstated as contractual officer who has been appointed for a specific period, then whether TDS is to be deducted u/s 194J or sec 192?

Also, salary is being paid on the terms mentioned in appointment letter. i.e all allowances are being paid on the same basis as was being paid before retirement.

Kindly revert at the earliest.

Thanks.

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3 Replies

Mukesh Garg (Chartered Accountant) (42 Points)
Replied 05 June 2016

Rahul first of all point is that retired person is appointed as employee or consultant, Is his name entered under the employee list. if he is entered as employee then TDS should be deducted under section 192 and he is appointed as consultant then TDS should be deducted under section 194J.

Rahul Kishor Dayama (Practice) (40 Points)
Replied 05 June 2016

Dear Mukeshji,

Thanks for the reply.

Employee name is in employee master list. But the employee is appointed only for the specific period. say 2 years. and his status in employee master is being shown as Contractual officer instead of previously being shown as Regular officer.

As per retirement policy, employee has to retire after attaining specific age. If the company wants to extend his services, then he is being appointed for specific duration.