Deduction of TDS

[Pradeep Jain]

Sir,

Our one employee got retirement at the age of 58 years. Due to need  of  work  we have hired him and issued a contract letter for one year. According to that he will report to plant every day. We are paying monthly consultancy fees on the basis of days  present. He is punching card for attendance .

Do we need deduct TDS under head 194 J or 192 .

Pradeep Jain

[Varghese PA]

Hi, I think you need to deduct tax u/s 194J only and also if the payment is likely to exceed the limit prescribed

[Guest]

Hi, I think you must deduct TDS under Head 194J or 194C because you issued a contact letter.......

[piyush khivasara]

Hello Pradeep bhai,

As per me the contract should be reviewed for same. As per definition of salary the term " contract to services" is different as against "contract for service". Also note that since the person is on our muster roll and the payment is directly related to same also other related acts should be considered like Proff. Tax and Provident Fund.

[Guest]

Pradeep ji,

[Guest]

Pradeep ji,

             as per your query you appoint as a consultant and you pay for consultancy or professional fees So it comes u/s 194J and deduct TDS if it is above 30,000/- at the rate of rate 10 percent basis.

AI Summary

TDS on consultancy fees: treat payments as professional fees or salary depending on contract character and control. If a rehired retired worker is engaged by written contract and paid consultancy or professional fees on an attendance/day rate basis, the operative position presented is to treat payments as subject to TDS on professional/consultancy fees under 194J, subject to the statutory threshold; however, if the engagement amounts to employment (contract of service) because of muster roll inclusion, daily attendance and employer control, salary withholding and payroll related obligations including professional tax and provident fund may instead apply.