Confused About Salary Deductions and No Payslip? Seeking Advice on Next Steps

Dear Sir,

I am working in a consultancy firm, the name of which I cannot disclose. My current salary is 8,000 per month, with total salary deductions of 1,000 Rs, including TDS and Professional Tax. This leaves me with a net amount of around 7,000. Unfortunately, I do not receive a salary slip.

Please advise me on what steps I should take in this situation. Your guidance would be greatly appreciated.

Regards,
Rakesh Singh

Dear Rakesh,

TDS means 'Tax Deducted at Source,' i.e., nothing but the Income Tax deduction from the sources of income that is to be paid to the Government (Statutorily liable). The applicable rate of TDS for providing Consultancy Services is 10.3%, which is deducted from the invoice/bill value charged to parties. For example, if your Company raises a bill for Rs.1.0 Lac for any consultancy service provided, like Recruitment, Excise, IR, Labour services, Projects, or any other service to X Company, X Company will deduct Rs. 10,300 from the bill as TDS and will be paid to the Government.

However, I am uncertain if the same amount is recovered from the salary of employees. Please check the terms and conditions of employment of any of your colleagues or anybody in a similar service. According to me, it is not the case.

I assume that from Rs. 8000, Rs. 824 (TDS), and Rs. 175 (Professional Tax) are deducted, and the net pay will be Rs. 7001.

Thank you,
TMS

If you are an employee with the agency and your salary is Rs. 8000 with no other monetary benefits, I feel you should not be subjected to TDS, i.e., Tax Deducted at Source (Income Tax). The employer has been assigned the responsibility to deduct Income Tax from employees' salaries and submit it to the Income Tax department. You can get this point clarified with your supervisors, employer, or the accounts department. Income up to Rs. 110,000 is exempt from Income Tax as of now. The proposed amendments effective 01.04.08 will further simplify things for employees. There is no justification for subjecting an employee to TDS with a monthly income of Rs. 8000. Of course, there has to be clarity regarding your not having any additional monetary benefits apart from salary. I hope I have been able to help you gain clarity. Please provide feedback and seek further clarification. I, along with others on this site, will try to assist you. - Hiten

You ask them to provide in writing that they are deducting your TDS. If you are an employee, then they shouldn't deduct it from your salary. If you are working on a contract, they can deduct 10.1% as tax deducted at source, but for that, they must give you either a payment advice or a Form 16 (which is generally issued at the end of the quarter or the financial year).

Do let us know in case you need any help with this.

Best Regards,
Sumit

Hi,

I totally agree with Hiten. Do you have a PAN card? I would also like to clarify that whatever TDS is deducted needs to be filed within 7 days. In Form No. 16, they have to specify the amount as well as the date corresponding to your deduction.

Secondly, if you are an employee, TDS will not be your part as it will be the employer's liability and not that of the employee.

Regards,
Revathi

Hi,

I am also with Hiten, but the important thing will be your contract with your employer and how they consider your services to them. If there is an employer-employee relationship, you can't be subject to TDS with a salary of 8000 PM. However, if you are under a contract providing services only as an individual contractor, you can be subject to TDS at 10.3%.

Therefore, ask for a salary slip or a copy of the terms and conditions of your services.

See you again.........

Hi Rakesh Singh,

For Rs. 8000, 10.3% TDS will be deducted as per TDS norms. But as per Income Tax, you do not need to pay. Hence, the amount can be reimbursed from the government by filing the returns. The amount will be reimbursed once the papers are through. However, as per our government norms, it will take a considerable amount of time; by that time, you will be the Head HR for a company. All the best for your future.

Regards,
Ramesh A

Dear Mr. Ramesh,

Can you please explain in brief about the TDS norms of 10.3%, like to whom this is applicable and how it is administered? Your guidance will be very much helpful to me.

- Hiten

Dear Rakesh,

If you are an employee, according to your salary, there will be no TDS deduction for you. You will have PF deduction of Rs.480, ESI deduction of Rs.380, and Professional Tax of Rs.80. Therefore, your total deductions will be 480 + 380 + 80 = 940.

Hope this information helps you.

Regards,
Keshav

Hi All, I am also facing the same problem. I am on a contract with a consultant and getting Rs. 12,000. They are providing a salary slip which shows a deduction of TDS at 10% of my salary. Why is this happening? As I am not in the taxable slab, why is TDS being deducted? One of my colleagues mentioned that they will reimburse the amount. However, my doubt is, first they are deducting, then they will reimburse. If they have to reimburse, why are they deducting in the first place? Please clarify my doubt.

Hi all members,

I am sharing useful information about TDS. The attachment contains all the information you need to know about TDS.