Hi Friends, I have recently joined as a consultant. They are treating me as an employee when it comes to facilities, they are saying that is not applicable. Can anyone suggest to me what is the difference between an employee and a consultant?
From United States, Fremont
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1From United States, Fremont
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Except for the 10% TDS, there are no statutory implications on consultants. The consultant's requirement will be time-bound, with no permanency, and they will not be on the company's payroll. The rules and regulations of the company do not apply to the consultants. Even the working hours and days will be as per the agreement.
Regards,
Kamesh
From India, Hyderabad
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Regards,
Kamesh
From India, Hyderabad
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Dear, Please clear your point. R u regular employee ? or externally providing consultation ?
From India, Pune
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From India, Pune
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Dear,
In my opinion, an employee is a person who performs his/her duties according to the rules and regulations of the company on a permanent basis. The company provides benefits to the employee. On the other hand, a consultant is appointed for a specific project or to solve a particular problem. Consultancy is not a full-time job, so the consultant is not eligible for such benefits.
Thank you.
From Pakistan
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In my opinion, an employee is a person who performs his/her duties according to the rules and regulations of the company on a permanent basis. The company provides benefits to the employee. On the other hand, a consultant is appointed for a specific project or to solve a particular problem. Consultancy is not a full-time job, so the consultant is not eligible for such benefits.
Thank you.
From Pakistan
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It appears from the query raised by him that the company has appointed him as a regular employee. However, instead of giving an appointment letter, the company has made an agreement with him as a professional for rendering his services. Neither the company provided proper information nor did he delve into details at the time of appointment. He might not be aware of the difference between a professional/consultant and an employee, as the understanding and paperwork differ.
Nowadays, such arrangements are common in many places to avoid statutory liabilities, compliance issues, and legal headaches.
Regards,
Pramod Thakar
From India, Pune
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Nowadays, such arrangements are common in many places to avoid statutory liabilities, compliance issues, and legal headaches.
Regards,
Pramod Thakar
From India, Pune
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Dear all,
I have deducted Rs. 12,360/- as TDS from the salary for the month of Dec-11. Due to some reasons, I didn't pay the TDS until 16.02.2012. Please guide me on how much interest I should pay along with the TDS of Rs. 12,360/-.
1. How to calculate interest?
2. How much percent of interest should I pay?
Thank you.
From United States
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I have deducted Rs. 12,360/- as TDS from the salary for the month of Dec-11. Due to some reasons, I didn't pay the TDS until 16.02.2012. Please guide me on how much interest I should pay along with the TDS of Rs. 12,360/-.
1. How to calculate interest?
2. How much percent of interest should I pay?
Thank you.
From United States
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[QUOTE=friend_tou86;1784433]Hi Friends,
I have recently joined as a consultant. They are treating me as an employee when it comes to facilities; they are saying that is not applicable. Can anyone suggest to me what the difference is between an employee and a consultant?
A person who is working for a full day and receives wages for the work is an employee, whereas a consultant is employed for a retainer fee by an employer for advising the employer on matters of reference. However, a clear reply can be given only after seeing the full letter of appointment terms and conditions.
V Hariharasubramanian
From India, Madras
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I have recently joined as a consultant. They are treating me as an employee when it comes to facilities; they are saying that is not applicable. Can anyone suggest to me what the difference is between an employee and a consultant?
A person who is working for a full day and receives wages for the work is an employee, whereas a consultant is employed for a retainer fee by an employer for advising the employer on matters of reference. However, a clear reply can be given only after seeing the full letter of appointment terms and conditions.
V Hariharasubramanian
From India, Madras
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Dear Ramesh,
Please consider the following accounting effects within your books of accounts and the method of accounting.
If the salary for the month of December is recorded in the books, i.e., payable on 31.12.2011, in that case, TDS is also on the same date. In such a case, TDS liability is payable to the Government and is due by 7th January 2012. Hence, the interest payable on your TDS liability if you pay before 29.02.2012 would be 3% [1.5+1.5], i.e., Rs. 371/-.
If the salary for the month of December is recorded in the books, i.e., payable on or in the month of January 2012, in this case, TDS liability payable to the Government is due by 7th February 2012. Hence, the interest payable on your TDS liability if you pay before 29.02.2012 would be 1.5%, i.e., Rs. 185/-. Normally, salary provided on the last day of the month on Mercantile accounting system; hence, in your case, 3% interest would be applicable.
Regards,
Pramod Thakar
9822435423
From India, Pune
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Please consider the following accounting effects within your books of accounts and the method of accounting.
If the salary for the month of December is recorded in the books, i.e., payable on 31.12.2011, in that case, TDS is also on the same date. In such a case, TDS liability is payable to the Government and is due by 7th January 2012. Hence, the interest payable on your TDS liability if you pay before 29.02.2012 would be 3% [1.5+1.5], i.e., Rs. 371/-.
If the salary for the month of December is recorded in the books, i.e., payable on or in the month of January 2012, in this case, TDS liability payable to the Government is due by 7th February 2012. Hence, the interest payable on your TDS liability if you pay before 29.02.2012 would be 1.5%, i.e., Rs. 185/-. Normally, salary provided on the last day of the month on Mercantile accounting system; hence, in your case, 3% interest would be applicable.
Regards,
Pramod Thakar
9822435423
From India, Pune
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Dear Sir, Employee is a servant to the Co. on full time basis. Whereas the Consultant job is doing specified work on contract basis. D.Gurumurthy HR/IR Consultant
From India, Hyderabad
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From India, Hyderabad
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Consultant Vs Employee - a nice thread.
Kindly clarify whether a "consultant" is eligible for privilege leaves like earned leave, casual leave, and sick leave, as given by the company to employees? Can a "practicing Chartered Accountant" work as a "consultant" for different companies? In case he does not turn up on time during office hours, is not available for statutory inspections for which he was appointed, does not take responsibility and onus on his job profile as a consultant, what action can we initiate?
From India, Bangalore
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Kindly clarify whether a "consultant" is eligible for privilege leaves like earned leave, casual leave, and sick leave, as given by the company to employees? Can a "practicing Chartered Accountant" work as a "consultant" for different companies? In case he does not turn up on time during office hours, is not available for statutory inspections for which he was appointed, does not take responsibility and onus on his job profile as a consultant, what action can we initiate?
From India, Bangalore
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Dear Kumar,
Thank you for your prompt reply. Could you please clarify the following? I deducted TDS only on 31.12.2011. Am I liable to pay the same on or before the 7th of January 2012 without interest, right? However, I haven't paid it to date. Hence, am I liable to pay interest for the months of January and February 2012, right? Therefore, Rs. 12,360 x 1.5% x 2 = 371/-. Am I correct?
Thank you.
From United States
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Thank you for your prompt reply. Could you please clarify the following? I deducted TDS only on 31.12.2011. Am I liable to pay the same on or before the 7th of January 2012 without interest, right? However, I haven't paid it to date. Hence, am I liable to pay interest for the months of January and February 2012, right? Therefore, Rs. 12,360 x 1.5% x 2 = 371/-. Am I correct?
Thank you.
From United States
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Suppose we have deducted TDS from a person on the date 01.01.2009 u/s 194C. As per the chart shown above, the payment due date for deposit is 7.02.09. If we have made payment on 8.02.09, then interest will be applicable from the date of deduction. While calculating the period for interest on the late deposit of TDS, the period prescribed for making payment to the credit of the Central government is not to be excluded. So, the interest period will be calculated as follows:
- 01.01.2009 to 01.02.09: One month.
- 02.01.2009 to 08.02.09: Part of the month = one month.
Therefore, interest for two months at 1% per month will become 2%. So, a delay of one day will cost you 2%.
Read more: TDS DEPOSIT LATE BY ONE DAY: PENALTY 2%?? | SIMPLE TAX INDIA.
From United States
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- 01.01.2009 to 01.02.09: One month.
- 02.01.2009 to 08.02.09: Part of the month = one month.
Therefore, interest for two months at 1% per month will become 2%. So, a delay of one day will cost you 2%.
Read more: TDS DEPOSIT LATE BY ONE DAY: PENALTY 2%?? | SIMPLE TAX INDIA.
From United States
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Dear,
In the context of the "accrual system" of accounting, the TDS arises when you recognize the liability in your books of accounts, whether you did pay or not. Since you mentioned "deducted on 31.12.11," the very same day the liability accrued. Had you remitted by 7.1.12, there was no question of interest. Since there is a delay (continuing), the interest accrues every month, i.e., on a calendar month basis, from the date of deduction of TDS, i.e., Dec.11 - one month, Jan.12 - one month, Feb.12 - one month. For 3 months @ 1.5% per month, or till you remit. Clear?
Kumar S.
From India, Bangalore
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In the context of the "accrual system" of accounting, the TDS arises when you recognize the liability in your books of accounts, whether you did pay or not. Since you mentioned "deducted on 31.12.11," the very same day the liability accrued. Had you remitted by 7.1.12, there was no question of interest. Since there is a delay (continuing), the interest accrues every month, i.e., on a calendar month basis, from the date of deduction of TDS, i.e., Dec.11 - one month, Jan.12 - one month, Feb.12 - one month. For 3 months @ 1.5% per month, or till you remit. Clear?
Kumar S.
From India, Bangalore
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Dear member,
The other members have adequately explained the difference between a consultant and an employee. However, mere designation or nomenclature will not be a determinative factor. It is the terms of your contract and the way you are treated by the employer that will determine your status.
B. Saikumar
HR & Labour Law Advisor
Mumbai
From India, Mumbai
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The other members have adequately explained the difference between a consultant and an employee. However, mere designation or nomenclature will not be a determinative factor. It is the terms of your contract and the way you are treated by the employer that will determine your status.
B. Saikumar
HR & Labour Law Advisor
Mumbai
From India, Mumbai
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Dear,
Without verifying the terms and conditions of consultancy, it is not correct to comment. However, normally there won't be formal leave or office timings for consultants unless they are required to work at your office on a regular basis. This is due to the fact that there is no employer vs. employee relationship. Nowadays, many firms hire individuals as "Consultants" to handle statutory work like PF, ESI, VAT, TDS on a regular basis even though they are not strictly consulting on other matters. Strictly enforcing timings on Chartered Accountants would depend on the working arrangement agreed upon with the reporting officers/HODs and their rapport with them. If you wish to take action, it would be better to consult the competent authority in your company.
Regards,
kumar.s.
From India, Bangalore
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Without verifying the terms and conditions of consultancy, it is not correct to comment. However, normally there won't be formal leave or office timings for consultants unless they are required to work at your office on a regular basis. This is due to the fact that there is no employer vs. employee relationship. Nowadays, many firms hire individuals as "Consultants" to handle statutory work like PF, ESI, VAT, TDS on a regular basis even though they are not strictly consulting on other matters. Strictly enforcing timings on Chartered Accountants would depend on the working arrangement agreed upon with the reporting officers/HODs and their rapport with them. If you wish to take action, it would be better to consult the competent authority in your company.
Regards,
kumar.s.
From India, Bangalore
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Consultant is an advisory status just like Solicitors, Auditors, etc. The Employee-Employer relationship is a boss-servant type relationship. Being a Consultant is prestigious, whereas an employee position is one among the staff. Nowadays, MNCs tend to appoint experienced professionals as Consultants only, as everyone knows how to bypass statutory obligations. An employee can work with only one employer, whereas a Consultant can work with many concerns.
R Swaminathan
From India, Coimbatore
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R Swaminathan
From India, Coimbatore
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Consultant is a very vague term and defines nothing. A full-time employee receiving all statutory benefits can be designated as a Consultant. Most IT companies have full-time employees designated as Consultants. Nowadays, Consultant is merely a designation and nothing more.
The only basis or document to differentiate between a regular employee and someone working as a Professional is the employment contract.
There are court rulings where the court has stated that what matters is the employee's job profile for obtaining statutory benefits under different labor laws, not the designation.
Nowadays, it has become a trend to designate an employee as a Consultant to evade the responsibilities of providing statutory benefits.
Due to all these manipulations by employers, the term employee is being redefined under different labor laws. The Payment of Gratuity Act also redefined the term Employee.
I have seen a few employment contract letters that contradict the given job profile. For instance, an employment contract letter designates someone as a Consultant, whereas that individual has been assigned not only an advisory role but also an executive role.
From a legal standpoint, a Consultant can only have an advisory role.
Regards,
Kamal
From India, Pune
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The only basis or document to differentiate between a regular employee and someone working as a Professional is the employment contract.
There are court rulings where the court has stated that what matters is the employee's job profile for obtaining statutory benefits under different labor laws, not the designation.
Nowadays, it has become a trend to designate an employee as a Consultant to evade the responsibilities of providing statutory benefits.
Due to all these manipulations by employers, the term employee is being redefined under different labor laws. The Payment of Gratuity Act also redefined the term Employee.
I have seen a few employment contract letters that contradict the given job profile. For instance, an employment contract letter designates someone as a Consultant, whereas that individual has been assigned not only an advisory role but also an executive role.
From a legal standpoint, a Consultant can only have an advisory role.
Regards,
Kamal
From India, Pune
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Here is an interesting list that you might find helpful when considering whether someone is employed or self-employed via a consulting arrangement. The authorities will tend to look behind the words of any contract and look at the substance of a relationship.
FACTORS TO CONSIDER RELATING TO EMPLOYMENT STATUS
The following is a list of considerations when reviewing employment status.
1. Does the individual personally have to do the work or can they hire others in their place?
2. If the individual can sub-contract the work they are more likely to be self-employed.
3. Can the individual be controlled (even if that control is not necessarily exercised) as to where they work, when they work and what work they do?
4. If the answer to these questions is yes, this is a strong indication of employment.
5. Is the person recognised as being part and parcel of your own organisation? Do you have direct employees who do the same or similar work to the “self-employed” individual?
6. If so, it is very likely that you are treating the worker as an “employee”.
7. Does the individual work wholly or mainly for one organisation?
8. This is a likely indication of employment. However, a particular self-employment contract may be lengthy and involve all or nearly all of the self-employed person’s time and work. Other individuals may work for a number of persons, for a relatively short engagement each time, but each of those engagements could be as an employee. A worker could be engaged for just one day and could still be an employee.
9. Does the person provide the materials to carry out the work? Do they supply their own tools and not just the ordinary small tools that many employees provide?
10. The more the person provides and risks their own materials and resources, the more likely they are to be self-employed.
11. Does the individual control a business organisation? Are they in business on their own account? Do they pay their own workers?
12. These factors indicate self-employment. However, someone can be self-employed and still be an employee of a particular person, due to the nature of the work and the relationship between the two parties.
13. Does the person get paid for all time worked? Do they get paid by the week or the hour? Can they be paid overtime and holiday pay?
14. All these factors are strong indications of employment.
15. Does the individual tender for the job? Will they be paid the same amount regardless of how quickly or slowly the work is completed? Do they have to put incorrect work right at their own expense? How well can they profit or lose from how efficiently they work?
16. All these are good indications of a “true risk-taking self-employed entrepreneur”.
From United Kingdom, London
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FACTORS TO CONSIDER RELATING TO EMPLOYMENT STATUS
The following is a list of considerations when reviewing employment status.
1. Does the individual personally have to do the work or can they hire others in their place?
2. If the individual can sub-contract the work they are more likely to be self-employed.
3. Can the individual be controlled (even if that control is not necessarily exercised) as to where they work, when they work and what work they do?
4. If the answer to these questions is yes, this is a strong indication of employment.
5. Is the person recognised as being part and parcel of your own organisation? Do you have direct employees who do the same or similar work to the “self-employed” individual?
6. If so, it is very likely that you are treating the worker as an “employee”.
7. Does the individual work wholly or mainly for one organisation?
8. This is a likely indication of employment. However, a particular self-employment contract may be lengthy and involve all or nearly all of the self-employed person’s time and work. Other individuals may work for a number of persons, for a relatively short engagement each time, but each of those engagements could be as an employee. A worker could be engaged for just one day and could still be an employee.
9. Does the person provide the materials to carry out the work? Do they supply their own tools and not just the ordinary small tools that many employees provide?
10. The more the person provides and risks their own materials and resources, the more likely they are to be self-employed.
11. Does the individual control a business organisation? Are they in business on their own account? Do they pay their own workers?
12. These factors indicate self-employment. However, someone can be self-employed and still be an employee of a particular person, due to the nature of the work and the relationship between the two parties.
13. Does the person get paid for all time worked? Do they get paid by the week or the hour? Can they be paid overtime and holiday pay?
14. All these factors are strong indications of employment.
15. Does the individual tender for the job? Will they be paid the same amount regardless of how quickly or slowly the work is completed? Do they have to put incorrect work right at their own expense? How well can they profit or lose from how efficiently they work?
16. All these are good indications of a “true risk-taking self-employed entrepreneur”.
From United Kingdom, London
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@Helping-You-Hire
A person working full-time exclusively for a single employer and a person working for multiple employers can be termed as a consultant. However, in the first case, there is an employer-employee relationship, whereas in the second case, there is no employer-employee relationship. Under any circumstances where there is an employer-employee relationship, the person is entitled to all statutory benefits, even if he/she is working as a consultant.
It is important to note that any contract or agreement signed between two or more people that is contrary to the law or act of the time is null and void from a legal point of view.
From India, Pune
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A person working full-time exclusively for a single employer and a person working for multiple employers can be termed as a consultant. However, in the first case, there is an employer-employee relationship, whereas in the second case, there is no employer-employee relationship. Under any circumstances where there is an employer-employee relationship, the person is entitled to all statutory benefits, even if he/she is working as a consultant.
It is important to note that any contract or agreement signed between two or more people that is contrary to the law or act of the time is null and void from a legal point of view.
From India, Pune
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This is for HR professionals who are decision-makers in employment-related matters.
The courts in India have reviewed such conditions (establishing employer-employee relationships) and categorically ruled that any "negative covenant" in an employment contract does not curb an employee's rights to seek statutory benefits.
Regards,
Kamal
From India, Pune
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The courts in India have reviewed such conditions (establishing employer-employee relationships) and categorically ruled that any "negative covenant" in an employment contract does not curb an employee's rights to seek statutory benefits.
Regards,
Kamal
From India, Pune
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Dear All,
We have advisors. However, despite treating them as advisors, they still have cheque signing power, etc. I haven't mentioned their names in the attendance register. Is it required? Like others, they also receive a salary per month, with regular professional tax deductions. I believe this is the wrong procedure.
I kindly request clarification from all of you on whether this procedure is correct or incorrect.
Regards,
Murali
From India, Hyderabad
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We have advisors. However, despite treating them as advisors, they still have cheque signing power, etc. I haven't mentioned their names in the attendance register. Is it required? Like others, they also receive a salary per month, with regular professional tax deductions. I believe this is the wrong procedure.
I kindly request clarification from all of you on whether this procedure is correct or incorrect.
Regards,
Murali
From India, Hyderabad
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Dear,
What does their appointment order say? Are they Advisers, Consultants, or Employees (in which case, what Designation)? If they are employees, then you should enter them in your attendance register. If not, you need not list them in the General Attendance Register. However, you can maintain a separate Attendance Notebook to record their working days (Advisors or Consultants do not necessarily need to sign the Attendance Register, but you will keep an Attendance Book to have a record for remuneration or Conveyance Expenses, etc.). TDS, as applicable, has to be deducted.
There is no objection to giving them cheque signing authority or making monthly payments.
Regarding Professional Tax, they need not be included as they are not considered your employees.
It is common for retired government officers to be engaged as Advisers or Consultants to handle statutory matters like Excise, Tax/VAT, IT, ESI & PF, etc. They could be part-time or full-time depending on the arrangement between the firm and these individuals.
Kumar S.
From India, Bangalore
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What does their appointment order say? Are they Advisers, Consultants, or Employees (in which case, what Designation)? If they are employees, then you should enter them in your attendance register. If not, you need not list them in the General Attendance Register. However, you can maintain a separate Attendance Notebook to record their working days (Advisors or Consultants do not necessarily need to sign the Attendance Register, but you will keep an Attendance Book to have a record for remuneration or Conveyance Expenses, etc.). TDS, as applicable, has to be deducted.
There is no objection to giving them cheque signing authority or making monthly payments.
Regarding Professional Tax, they need not be included as they are not considered your employees.
It is common for retired government officers to be engaged as Advisers or Consultants to handle statutory matters like Excise, Tax/VAT, IT, ESI & PF, etc. They could be part-time or full-time depending on the arrangement between the firm and these individuals.
Kumar S.
From India, Bangalore
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Do they have an appointment or any board resolution? Retired senior employees are given certain powers even after retirement, but there should be some written documentation. If you could forward such a document, it would be easier to provide a proper response.
From India, Madras
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From India, Madras
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From last one month i am not receiving cite hr mails kindly clarify the reason as i am five year old member
From United States, Chicago
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From United States, Chicago
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Dear All,
Has HR Cite stopped sending emails to all the members, which members usually received on a daily basis? I have been consistently raising this issue daily, but I have not received any replies from anyone regarding the matter. I have been associated with HR Cite for the past 5 years. Could you please clarify my doubt?
Thank you.
From United States, Chicago
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Has HR Cite stopped sending emails to all the members, which members usually received on a daily basis? I have been consistently raising this issue daily, but I have not received any replies from anyone regarding the matter. I have been associated with HR Cite for the past 5 years. Could you please clarify my doubt?
Thank you.
From United States, Chicago
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Dear Sir,
I have recently joined a new company as an accountant, and I noticed that TDS is being deducted from my salary each month, amounting to Rs. 1000/- from 1st April 2014 to 28th February 2015. The total TDS liability for this period is Rs. 11000/-. Could you please guide me on how to calculate the TDS interest on this amount? I would appreciate it if you could provide me with a step-by-step explanation.
Thank you for your assistance.
Regards,
Mohit Jain
From India, Udaipur
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I have recently joined a new company as an accountant, and I noticed that TDS is being deducted from my salary each month, amounting to Rs. 1000/- from 1st April 2014 to 28th February 2015. The total TDS liability for this period is Rs. 11000/-. Could you please guide me on how to calculate the TDS interest on this amount? I would appreciate it if you could provide me with a step-by-step explanation.
Thank you for your assistance.
Regards,
Mohit Jain
From India, Udaipur
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