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Practical Income Tax
Income Tax for Salaried Employees

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


Salary paid to employees.jpg



Q 1A

Suppose an HR is hired on Contract at 20000 per month

What is TDS deduced by company

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Does HR need to file Income Tax Return?

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Calculate Refund of TDS in this case.

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Which ITR Form to be filled for Employees on Contract

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Complete the following table

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

Also Compute Income to be shown in ITR?



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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.