An accountant (not a Chartered Accountant) is paid GST accounting charge of say Rs 30000/= or Rs 50000/= annually for the financial year in March. Will there be any liability to deduct PF? If not, do we still need to report it in the monthly PF return for March as a non deduction employee after allotting a PF account number?
Further, will such payment attract TDS under the Income Tax Act?
Pls answer. Thanks.
From India, Bikaner
1Further, will such payment attract TDS under the Income Tax Act?
Pls answer. Thanks.
From India, Bikaner
If you have hired an accountant on a retainership basis you need not pay PF in respect of this person. This is because he is not an employee of your organisation but there exists only a contract for service and which is outside the purview of ESi and PF. For the service that he renders, he will be issuing an invoice in favour of the company and the company is meeting that invoice by paying the amount. In this case there is no element of master servant relationship.
From India, Kannur
From India, Kannur
Many thanks Madhuji.
In another case, there were monthly invoices received from an accountant for accounting charges of Rs 2500/= per month. But the Enforcement Officer treated it as being liable to PF. He took the view that an accountant is not a professional like lawyer or CA, and so his fee is not professional fee, but only a salary for his services. So he created demands for many previous years on this premise treating the accountant as an employee. I do not know if he was right or wrong in that case.
But if there is no monthly payout, just an annual invoice in March, of an amount more than the threshold of PF, then it should certainly be out of PF.
Please enlighten.
Regards.
From India, Bikaner
In another case, there were monthly invoices received from an accountant for accounting charges of Rs 2500/= per month. But the Enforcement Officer treated it as being liable to PF. He took the view that an accountant is not a professional like lawyer or CA, and so his fee is not professional fee, but only a salary for his services. So he created demands for many previous years on this premise treating the accountant as an employee. I do not know if he was right or wrong in that case.
But if there is no monthly payout, just an annual invoice in March, of an amount more than the threshold of PF, then it should certainly be out of PF.
Please enlighten.
Regards.
From India, Bikaner
Please explain to the Enforcement Officer that he is an independent contractor and he is not governed by the code of conduct and other HR policies of the company but he works according to his inconvenience using his own resources and infrastructure. There exists only a contract FOR service and not a contract OF service. For the services he raises an invoice and such an invoice is subject to GST at the prescribed rate subject to conditions attached to turnover etc.
If you want to come out of such hassles, you can also ask the accountant to raise an annual bill. But I would not recommend such an action because an accountant working independently who take the work of other companies along with yours is not an employee.
From India, Kannur
If you want to come out of such hassles, you can also ask the accountant to raise an annual bill. But I would not recommend such an action because an accountant working independently who take the work of other companies along with yours is not an employee.
From India, Kannur
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PF Annual Returns.zip
PF not applicable on CTC 18.3.2014.pdf