Understanding TDS Deductions: Can Employees Under Section 194C Get a Salary Certificate?

If an employee is working under section 194C and a TDS deduction of 1% is applicable, can they claim any payslip or salary certificate? If yes, what are the formats?

Understanding Section 194C and TDS Deductions

Any individual working under section 194C falls under a contract where 1% TDS is deducted. Since they are not considered employees, they are not eligible to receive a salary certificate or payslip. Only the work contract can be provided.

Thank you for your response. I would like to inquire about the nature of employment as a contractor/sub-contractor (194C) where the employer is deducting 1% tax from the monthly salary. Can the employee request a monthly pay slip? Or is a TDS certificate sufficient for the same? If the individual is entitled to a pay slip, could you provide information on the format?

Please advise.

Thanks.

I think your confusion stems from the fact that you are using the term "employment" whereas you should be using the term "engagement." Further, I am guessing that in order to maximize the post-tax money into the hands of the person, he/she has been engaged under 194(c) and has been shown as a Contractor, even though possibly he/she is an employee in all other respects.

Assuming that my guesses are correct, you need to bear in mind that the person you have engaged is a Contractor and hence cannot be an employee. If a person is not an employee, there can be no case for seeking any salary slip/pay slip.

If I were to draw a parallel for purposes of an example, let us assume that you have engaged a person as a media planner to handle your advertisements and media coverage. It is likely that this contract would be open-ended, i.e., in perpetuity till revoked. Also, this person would be paid a certain amount on a monthly basis for services rendered. However, this person cannot claim or ask for a salary slip/pay slip. The person is either an employee (in which case 194(c) would not apply and TDS at normal rates for an employee would apply) or the person is a contractor (in which case 194(c) would apply). You cannot have a situation where a person is a contractor and at the same time seek a monthly pay slip like an employee.

Regards,
Raju Bhatnagar

Mr. Raju Bhatnagar has clearly clarified the status of the person who is seeking a payslip. The person has no business to claim a payslip since he is not on the muster roll of the employer.

Regards,
SPKR

TDS Deduction for Employees and Contractors

TDS of an employee can be deducted under section 192B. TDS under section 194C can be deducted at 2% in the case of a contractor or 1% in the case of a sub-contractor. In this scenario, no salary slip can be provided; only a TDS certificate can be given.

Please let me know if you need further clarification or assistance.