Tax Saving

[Purva Indulkar]

Hi guys!

I want to apply for a tender for which I dont qualify .

I have approached two companies , who can apply for the tender .The transaction assuming the company gets the contract is as under:

1. The total invoice to be billed by company to client is 30,00,000 plus service tax .In the 30,00,000 amount , INR 6,00,000 work the company would do by themselves and balance work of 24,00,000 would be done by me. There is no legal documentation maintained between me and company .I assume that out of INR 24,00,000 my profit would approximate INR 10,00,000 . Now the company says that , the company would pay me INR 8,00,000 after deducting tax at 33 percent (as they shall pay tax at that rate to government as the profit shall be taxable to them) .

I have to ask:

1. should the company provide me any tds certificate for the said tax deduction( remember no legal documentation exists between us)?

2. is there any way out to escape the said tax deduction?

3. is this legal?

AI Summary

Individual Questions Tax Deduction on Tender Income; Seeks TDS Certificate and Legal Advice on Tax Compliance An individual is seeking advice on a tax-related issue involving a tender application. They have arranged with two companies to apply for a tender on their behalf. If successful, the company will bill the client INR 30,00,000, with INR 6,00,000 for the company's work and INR 24,00,000 for the individual's work. The company plans to pay the individual INR 8,00,000 after a 33% tax deduction. The individual inquires about the necessity of a TDS certificate, ways to avoid tax deduction, and the legality of the arrangement. A respondent clarifies that tax should be deducted at the prescribed rate, not 33%, and the company must provide Form 16A for income tax purposes. There is no legal method to avoid TDS unless the income is exempt.