Tax evasion by consultant
Mayank Arora
(Querist) 08 June 2015
This query is : Resolved
Hello Experts,
I am a freelance teacher. A college approached me through a consultant and I joined there. The college pays the consultant and then the consultant pays me. When the time came to pay the money, the consultant insisted I take cash payment.
I was promised a payout of Rs 2000 per class NET on an SMS from him. I assumed this to be the amount after deducting TDS. Now the consultant is saying that he runs this business on the side and that he doesn't have an actual firm, so he will give me 2000 per class in cash. I declined saying that I want the money officially after tax deduction. So basically, Rs 2000 after deducting 10% TDS. He is not ready to give the increased amount either (Rs 2,222- so that I can pay the tax if he can't). Now the question is-
1) I have detailed whatsapp chats with him where he says that I should take money in cash since everyone else does it that way and that I'd be getting Rs 2000 only and that I don't have any other option.
2) He says that by "NET", he meant that college has deducted his TDS. Obviously, if tax is not deposited in MY account, then its not net.
3) This person is working in a reputed company and is running a business on the side without any business entity. Clearly, he has evaded a lot of taxes. College pays him money in his savings account and he pays everyone by cash. He has accepted this multiple times on whatsapp.
What should I do now? How can I complaint against this?
Anirudh
(Expert) 08 June 2015
IF the college pays him money in his Savings Bank Account, how can he evade taxes?
Mayank Arora
(Querist) 08 June 2015
Sir, think of it like this. The college pays him Rs 2800 per class after deducting his TDS. Then he needs to pay me Rs 2222 (gross) and Rs 2000 (after deducting TDS). So effectively his margin is 2800-2222. Now he is insisting on paying cash of Rs 2000 so that he ends up pocketing the TDS he was supposed to deposit into my account.
malipeddi jaggarao
(Expert) 09 June 2015
If you are not interested, withdraw from providing services to him. Are filing tax returns? Do you have assessable income? If not why do you worry? Why do you pose your nose about his default in payment of taxes?
Rajendra K Goyal
(Expert) 09 June 2015
If you are filing Income Tax returns, show in the returns what you are getting or amount for which you are giving the receipt / acknowledgement.
Paying tax is your liability either through TDS of self assessment. Consultant has promised you 2000/- and above it there exist no reason for him to pay TDS extra.
However, if not satisfied, you have the option to withdraw and search for another job.
Anirudh
(Expert) 09 June 2015
Dear Mayank,
You are jumping the gun!
When you said that the college pays to him in his Savings Bank Account, I said once the amount is paid in bank, the question of evading tax does not arise.
Now, from that point, you are jumping to another point, that too without any basis. It is your assumption that he is pocketing TDS. The question of his pocketing TDS would not arise - as once he deducts TDS he has to remit it to the Govt. If he does not deduct TDS he need not pay to the Govt. In any case, if payment to you in cash exceeds Rs. 30000/- in a year, he would not be able to claim the expenditure unless he has deducted TDS.
The basic point is, in your hurry, you did not get the compensation clearly defined in writing.
As suggested by Mr. Jagga Rao, if you so desire, you can discontinue your services as he is not meeting your expectation (as per your version).
Kumar Doab
(Expert) 09 June 2015
The agreed payout as per your post is @ Rs2000/class 'NET'.
How many classes you take/day and what would be your estimated income?
He is employed and into side business and is paid by credit to his SB a/c.
You have record and can succeed in settlement with him and spoil future business thru him.
You are wise enough to decide your next move.
