Hi, I was hired by an organization in consultant mode with a monthly salary of Rs. 15,000. They deducted 1% TDS from it, which means my net take-home was Rs. 14,850. How is this possible? What are the TDS details and slabs? I thought they should deduct 10% on professional fees. Please enlighten me.
From India, Mumbai
Acknowledge(0)
Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Understanding TDS Deduction for Consultants in India
In India, Tax Deducted at Source (TDS) is a mechanism where the employer deducts tax from the employee's income at the time of payment. The TDS rates and slabs vary based on the nature of income, including professional fees for consultants.
Explanation of the TDS Deduction in Your Case
1. Your monthly salary: Rs. 15,000
2. TDS deduction rate: 1%
3. Net take-home pay: Rs. 14,850
Calculation Breakdown
- TDS deduction: 1% of Rs. 15,000 = Rs. 150
- Net take-home pay: Rs. 15,000 - Rs. 150 = Rs. 14,850
Reason for the 1% TDS Deduction
The 1% TDS deduction might be applicable under Section 194J of the Income Tax Act, which covers fees for professional or technical services. The standard TDS rate for professional fees is 10%, but there are exceptions based on specific circumstances.
Next Steps
1. Verify the TDS details provided by your employer to ensure accuracy.
2. Consult with your employer's finance or HR department for clarification on the TDS deduction.
3. Request a detailed explanation of the TDS calculation and the specific section under which the deduction was made.
By following these steps, you can gain a better understanding of the TDS deduction on your consultant income and address any discrepancies effectively.
From India, Gurugram
Acknowledge(0)Amend(0)
54In India, Tax Deducted at Source (TDS) is a mechanism where the employer deducts tax from the employee's income at the time of payment. The TDS rates and slabs vary based on the nature of income, including professional fees for consultants.
Explanation of the TDS Deduction in Your Case
1. Your monthly salary: Rs. 15,000
2. TDS deduction rate: 1%
3. Net take-home pay: Rs. 14,850
Calculation Breakdown
- TDS deduction: 1% of Rs. 15,000 = Rs. 150
- Net take-home pay: Rs. 15,000 - Rs. 150 = Rs. 14,850
Reason for the 1% TDS Deduction
The 1% TDS deduction might be applicable under Section 194J of the Income Tax Act, which covers fees for professional or technical services. The standard TDS rate for professional fees is 10%, but there are exceptions based on specific circumstances.
Next Steps
1. Verify the TDS details provided by your employer to ensure accuracy.
2. Consult with your employer's finance or HR department for clarification on the TDS deduction.
3. Request a detailed explanation of the TDS calculation and the specific section under which the deduction was made.
By following these steps, you can gain a better understanding of the TDS deduction on your consultant income and address any discrepancies effectively.
From India, Gurugram
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Circular No 1-2018 Processing of income-tax returns under section 143(1) of the Income-tax Act .pdf
PENALTIES UNDER INCOME TAX ACT.docx