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Abhishek Lyall (Service)     11 March 2012

Employment vs consultancy

Dear All,

My company has given me appointment letter stating that your professional fees is xx amount and deduct TDS under section 194J @ 10% of the income Tax.

I am required to put in 20 days of work in a month and cannot take any other work assignment without the permisson of the CEO. I am also required to sign the attendance every day and apply for leaves, as required by any other employee of the organisation.

Only difference between the reqular employee and myself is that I am not eligible for any other benefits like PF, Graduity etc.

My query is since my work is controled on day to day basis by my boss and I restricted to take any other work, whether still I will be considered as a Consultant or employer and employee relationship exists.

If Emploeyer and employee relatioship exists can TDS be deduted under Salaries?

Thanks



Learning

 1 Replies

Kumar Doab (FIN)     11 March 2012

Your letter issued to you would clearly specify your association with the company e.g. retainer ship basis, lump sum payment, or monthly payment for the tenure for which you have been hired, facilities, concessions applicable, which could be more than an employee e.g. no probation period, company car etc and non entitlement of gratuity, PF etc. The letter issued to you could be an agreement issued to a professional for rendering professional services and might not be an appointment letter. TDS as mentioned by you is applicable, if the amount payable to you exceeds the threshold limit.

You will be governed by "Contract Act" rather than Labor Laws.

You may show the letter issued to you your lawyer.


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