harminder (student) (35 Points)
12 December 2013Sir i am a student of 2 nd year b come
i wanna know about the taxability of a contract person
Mr Ram was hired by a health department on contract basis on 1-4-2012 on 10000 pm during the f.y 2012-13 and his bank account was credited with 120000/-
now tell me how much tax he has to pay whether taxable under TDS or Salary slab applicable to him.
urgent
You have not mentioned the nature of contract. I assume that it is in the nature of business and not profession.
Mr Ram will be a contractor (as you said that he was taken on contract basis) and not employee. So, TDS will be deducted @ 1% on Rs 120000/- by health dept.(It will be 10% if Ram is a professional eg Doctor) Mr Ram has to furnish his PAN to the Dept.
The tax he has to pay depends on his total income fr the year from all sources less the expenses. The income has to be atleast 8% of gross receipts. he will also get deductions u/s 80C etc, if any.
The Tds will be reduced from the tax amount and the balance, if any would be payable by Mr Ram.
Rajiv Limbachiya
(Deputy Manager)
(140 Points)
Replied 13 December 2013
You should deduct TDS @ 10% under Section 194J, and expense should be considered as a professional fees.
Rajendra
(Accountant)
(23 Points)
Replied 13 December 2013
Ashok Kumar
(nil)
(35 Points)
Replied 14 December 2013
yes.......if mr. ram is a professional person then, tds deduct @ 10% and section 194J or mr. ram is a contract person then tds deduct @ 1% and section 194C.
CAclubindia
