Saswatabanerjee
Partner - Risk Management
Loginmiracle
Consultant & G.m.
Antonnz
Executive
+2 Others

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Hello,
Our IT company want to recruit some technical professionals as consultant who will not be on companies pay-roll. We are planning to deduct 10% TDS on their professional fees and issue them Form16A. Professional fees would be more or less for each month.
Apart from Form16A, some of them have demanded for a document like Payslip.
Can somebody please share any such Payslip/Salary Certificate format specially for Consultants?
Thanks in advance.
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No, you can not issue pay slips to such a consultant That will cancel the entire benefit of putting them as a consultant
We all need to understand the basic fact that there are only two categories on employment under any Labor Act. i.e Employees on payroll of the employer and contractor employees or independent contractor. there is no third catergory on employment.

The term Employee has been claerly defined under various Acts like Employment Exchanges (Compulsory Notification of Vacancies) Act, Employees Provident Fund Act, ESIC Act, Minimum Wages Act, payment of Wages Act, payment of Grauity Act etc.

Consultants/ Professionals are the terms used in Income Tax Act only. The provisions and scope of Income Tax Act is very much limited to one's income and liability to pay taxes.

All employment related issues are governed by the labor Acts and not by Income Tax Act.

The terms Consultants/ Professionals have no meaning under any employment/labor related acts like EPF, ESIC, ID Act, Grautity Act, Industrial employment act etc.

I have seen in most of the cases Employers are mixing the terms of Income Tax Act with employment conditions just to deny the Social Security Benefits to employees which amounts to unfair labor practice and may invite legal complications afterwards.

There are several court rulings in which the Hon. Court have ruled that its the actual job work,supervision of the employer,source of payment etc which decides on one's employment category and not one's designations as consultants/professional etc.

A payment slip can be provided to a person designated as Consultant but from Income tax point of view person designated as Professionals should raise a professional charges invoice and get the payment as professonal fees with deductions of 10% as TDS.

regards,

Kamal
Dear zaamru,
The fact that you are deducting TDS @ 10% itself shows that he is not an employee and he doesn't draw salary but only that he is paid "Consultancy Fees" (this is called a Retainer Fees) monthly, which means where is the question of giving him a Pay slip. What you can issue to him is a statement of month wise fees, TDS and net paid which is nothing but Form 16A. As he is not an "Employee" there is no question of Pay slip.
kumar.s.
While im giving payslip for consultants ,is there any problem mentioning Basic pay .Please share professional fee slip format .
Thank you
kindly share the format for cosultant-Payslip
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