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
TDS for Retired Employee Rehired as Consultant: Deduct Under Section 194J, Review Contract for Additional Obligations. An inquiry was made regarding the appropriate tax deduction at source (TDS) for a retired employee rehired on a contractual basis, receiving monthly consultancy fees. The discussion focused on whether TDS should be deducted under section 194J or 192 of the Income Tax Act. Responses suggested deducting TDS under section 194J, as the arrangement is considered a consultancy service. It was also advised to review the contract terms and consider related legal obligations like Professional Tax and Provident Fund, especially if payments exceed the prescribed limit. (AI Summary)