Fwd: TDS Query- CS in whole time employment

[Astarag]

Dear friends   pls give your views   The secretary has been appointed by contractual agreement for one year(subject to renewal each yr) for consolidated remuneration of Rs. 40,000/- per month. Form 32 has been filed for him.   The company is asking to deduct TDS @10% flat rate, as they deduct in case of any other out side professional service providers like practising company secretary, auditor etc, as professional fees   is it correct to deduct TDS in this manner   or it should be deducted by calculating the salary under the head salary, i.e under the slab rate as applicable to salary income considering the full 40,000 as taxable salary(with out any deductions like HRA , etc)   In my opinion the CS is whole time employee of the company, even if appointed for one year (subject to renewal) amount paid to him is not par with fees paid to outside professional and should be taxable under slab rate   please consider it urgent and give your views pls .........every cloud has a silver lining........

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with regards,

Cs. P.A. Patnaik

[renukameera91]

Dear Sir,

 

In this case he has filed form -32 and he becomes employee of the company and for the professional/ Technical service providers, we are not filing form-32.

Hence, sec-192 of Income tax Act-1961, only will attract for TDS deduction.

 

So cannot deduct at flat rate.

 

With Regards,

C.Renuka

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[CS A Rengarajan]

We are filing of Form 32 by virtue he become principal officer of the company. The tax to be deducted by salary tds slab not on professional services. He may be appointed for one year.

Contrary view solicited

best regards

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csarengarajan
Company Secretary, Chennai
email csaren...@gmail.com
mobile 093810 11200
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[K.Muthu samy]

The matter to be viewed based the terms of appointment.

Once Form 32 is filed he become a full time employee of the company.  Full time employee may be appointed on regular grades of the company or on consolidated basis.

It is be noted that the professional so appointed cannot hold any other employment or service.  Hence, he is not an independent professioanl attacting TDS applicale to profesional services.

 

Further, the company is bound to comply with the other labour laws like PF, ESI in this case.

With regards

K.MUTHUSAMY B.Com, FICWA, FCS

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Company Secretaries in Practice
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Phone : 0422 4391973
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[CS Amar]

Dear Priti,

 

It does not matter for 1 year or more, once form 32 filed , it means he is employee of company. So there is no question of Flat TDS. In this case salary provision applicable (Section 192 of IT Act 1961)

 

Thanks & Regards
CS Amarendra Jena

[Suresh Kumar Vaishraj]

Yes, tds would apply only in the cases of service availed from outside agencies. Whereas, in case of company secretary though appointed for a month, he/ she is an employee of the Company and not an outside agency. Thus becomes a person on the Company's rolls and will be subjected to tax slabs as applicable to other employees and also will be subjected to other Labour Laws.

If this not correct, then Company's will start treating the salaries of director (finance), director (plant & machinery), director (procurement) as consultancy charges and will apply flat rate of tds while making such payment.

 

Thus flat rate of tds shall not apply to C.S.

 

Thanks and Regards,

Suresh Kumar V
Company Secretary
91-9849991201