How to Handle TDS for an Overseas Contract Worker Paid in India? Seeking Advice!

Hi All, I need quick help on the TDS part for a contract resource. Here is the background. We have hired one contract resource, and since the candidate mentioned that they need 12L, we have converted it into a per-hour contract basis. We've also committed that we will not deduct any TDS from the employee's end, and the consultant needs to manage their own TDS. Is it possible because the candidate is currently located in another country, and we will pay them to their bank account in India? If it's possible, what is the procedure to facilitate this?

Please advise.

Location: Tiruchchirappalli, India

consultant benefits, income tax, returns under labor laws, independent contractor, bank account, TDS deduction, contract basis, Country-India, City-India-Tiruchchirappalli

As an independent contractor, managing your own TDS (Tax Deducted at Source) can be a complex process, especially when dealing with cross-border payments. Here are the steps to facilitate this process:

Understanding TDS for Independent Contractors in India
- Independent contractors are responsible for managing their own TDS payments in India.
- The TDS rate for contractors can vary based on the nature of the services provided.

Procedure for Managing TDS as an Independent Contractor
1. [🔍] Determine the Applicable TDS Rate:
- Consult with a tax advisor to understand the specific TDS rate applicable to your services.

2. [💼] Obtain a PAN (Permanent Account Number):
- Ensure you have a PAN card as it is mandatory for TDS compliance.

3. [💰] Invoice Submission:
- Submit detailed invoices to the company for the services rendered.

4. [📝] TDS Calculation:
- Calculate the TDS amount based on the applicable rate and the total payment received.

5. [📅] TDS Payment:
- Make the TDS payment to the government within the specified timelines.

6. [📑] TDS Returns Filing:
- File TDS returns on a quarterly basis using Form 26Q.

7. [🏦] Bank Account Details:
- Ensure your bank account details are accurate for receiving payments.

Considerations for Cross-Border Payments
- Consult with a tax expert to understand the implications of receiving payments from another country.
- Be aware of any double taxation agreements that may apply to avoid paying taxes twice on the same income.

By following these steps and seeking professional advice, you can effectively manage your TDS obligations as an independent contractor receiving payments in India.