Can Contract Employees Get a Tax Refund? Navigating TDS, ITR, and Savings Deductions

Hello Sir,

I am working as a contract employee with an IT firm (direct with the company). My monthly salary before TDS is Rs. 40,000. As per my knowledge, Rs. 4,000 every month would be deducted as TDS, which would be Rs. 48,000 per annum.

My question is, can I ask for the refund of the above Rs. 48,000 while filing the IT returns? If yes, how much would be the refund? How is the ITR filed for a contract employee? Can we show our savings for PPF & LIC and ask for the refund?

Thank you.
Vidya

Before a few days, you had posted the same query. Anyway, yes, 10% TDS will be deducted by your company under section 194J; however, individual income up to 2.5 Lacs is exempt. Obtain Form 16A (TDS Certificate) from your employer and file the return. PPF & LIC are admissible for deduction under section 80C, subject to a maximum of 1.5 Lacs. Not only the above 48,000 refund is subject to taxable income after considering all the deductions, if there is no tax liability, the entire TDS will be refunded.

Warm Regards,
Devesh Chauhan
Practicing In Accounts, Finance, Taxation, Labour Laws