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In Companies, Employees are of 2 types
1.Employees On Payroll
2.Employees On Contract
Employees on Payroll
It means that Employee has proper job with Company and receiving Salary directly from Company
TDS is deducted in this case as per Income Tax Slab Rate
|
INCOME |
TAX |
|
UPTO 250000 |
0 |
|
250000-500000 |
5% of (Income-250000) |
|
5000001-1000000 |
20% of (Income-500000) +12500 |
|
>1000000 |
30% of (Income-1000000) +112500 |
This we will study in detail in TDS Salary later
Employees On Contract
It means Employee is working with Company for a limited period and does not have proper job
Salary received in this case is taxable under 194 C or 194 J
Section 194 C @ 1% is for Blue Collared Employees i,e. Employee doing Manual Work like peon, guard, driver, delivery boy etc)
Or
Section 194 J @ 10% (For White Collared Employees like Accountant,Sales Executive,HR, Admin etc)
|
Employees Name |
Designation
|
Contract
|
Monthly Salary
|
Annual Salary
|
Covered in
|
TDS @
|
|
A |
Accountant
|
Contract
|
10,000
|
1,20,000
|
View Answer
194 J |
View Answer
10% |
|
B
|
Driver
|
Contract
|
10000
|
120000
|
View Answer
194 C |
View Answer
1% |
|
C
|
Peon
|
Contract
|
6,000
|
72,000
|
View Answer
194 C |
View Answer
Exempt [Less Than 100000 P.A. |
|
Employees Name |
Designation
|
Salary
|
TDS @
|
|
P |
Accountant
|
14000
|
View Answer
10 % [ Section 194 J] |
|
Q
|
Delivery Boy
|
14000
|
View Answer
1 % [ Section 194 C] |
