Dinesh Divekar
Business Mentor, Consultant And Trainer
General Manager

I am offered a consultant post in an institute but the appointment letter mentions pay under the head gross salary split into basic, ta, speciaL allowance..is it technically n legally right? and it mentions that 10% TDS will be deducted ...
In such case should I pay rest of tax according to gross pay as self assessment tax...?
Will the Consultant post confer a employee-employer relationship in this context?
9th July 2017 From India, Mumbai
Dear Sana,
Your client does not know the difference between salary and consulting charges. While former can be divided into several components like basic, house rent etc the latter is consolidated amount.
Anyway, even without understanding of the difference they will be deducting TDS of 10% which is legally correct. This deduction will be under Section 194J of IT Act. In your IT assessment you may show payment of this tax to get the input credit.
Dinesh Divekar
9th July 2017 From India, Bangalore
Hi Sana2017,

It's been a while and probably this will be my first contribution. I am just reading stuffs and I feel I can provide some insight.

To put it in a simple term, as a Consultant you should have what we can call a 'deed of agreement' or any agreement between you specifying as their 'consultant' and 1st party the company you are consulting with. Appointment letter is basically provided if you are under their payroll as an employee, in which as per your post I sense you don't work directly under any of the Directors or superiors of that company you're referring with --please correct me here if I am wrong.

Consultation, as you best know, provides improvement plans and recommends best solution available in any pre-existing policies/procedures. It's up to the company's management should they take it positively/seriously but if you sell it well then they might see a good future plan about your recommendations. Example: If you are a consultant of a training program and you surveyed the employees career plans/paths, in order for them to stay more years in the company and minimize the migration you may then recommend those training programs suited with their needs according to the survey/interviews. This involves cost of course and it's up to the company management to see if your recommendations are feasible.

With regard to tax, I am not familiar with it but as my suggestion above goes you only get paid consultation fees and the rest tax should be paid by you as per (we say) your tax declaration.

Good luck and more power!


10th July 2017 From Bangladesh, Dhaka
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