Who are Employees on Contract?

These employees are those who are working on Contract i.e. they are not on payroll of company

Normally TDS is deducted on such employee’s salary at 1% or 10%

(TDS at 1% is applicable under Section 194 C for blue collared employees like Driver, Guard Peon if amount paid during year is more than 100000 per annum

However, TDS @ 10% wil be deducted under Section 194 J for white collared employees like Accountant, HR, Admin, Sales) etc Peon if amount paid during year is more than 30000 per annum

 

Income Tax Return and Computation for Employees on Contract - Employees On Contract

 

Example

Q 1A

Suppose an HR is hired on Contract at 20000 per month

What is TDS deduced by company

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Q1B

Does HR need to file Income Tax Return?

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Q1C

Calculate Refund of TDS in this case.

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Q1D

Which ITR Form to be filled for Employees on Contract

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ASSIGNMENT

 

Complete the following table

Particulars  A B C D
Designation Salesman Driver Peon Accountant
Monthly Salary 10000 10000 6000 80000
Section        
TDS Rate        
Monthly TDS        
Net Salary        

Also Compute Income to be shown in ITR?

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  1. Practical Income Tax
  2. Income Tax for Salaried Employees
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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