Need to recruit a Sales Trainee...but not on rolls. How should I treat such recruitment?. Should there be any tax deduction while paying the stipend. If so, under what section.
From India, Bangalore
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From India, Bangalore
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Hi Instead of recruiting as Trainee under Stipend you shall consider them as Consultant. If recruited under the Consultant the you should deduct TDS at 10% as professional fee.
From India, Bangalore
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727From India, Bangalore
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Hi sir i have submitted pf form on 1 oct 2013 and now i m checking the status in epfo its showing that they recieved my pf settlement on 4 nov now how many days it will. to.get settled .
From India, Mumbai
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From India, Mumbai
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Hi!! Why not deduct TDS under section 194C? Professional fee - there is a definition under IT Act, which trainee do not fulfil. Best Regards, Divakar
From India, Bangalore
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From India, Bangalore
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Trainees/apprentices appointed by the government are exempted from income tax for the stipend paid to them. I am not clear as to how much you intend to pay the sales trainee. If it is within the tax limit, there is no problem. If it exceeds the limit, then it is better to treat him as a trainee on a temporary basis and deduct 10% for tax purposes.
From India, Madras
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From India, Madras
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Tax limit means which limits? Limits specified under TDS sections other than 192 or as per section 192?
Can you please provide some reference/notification of exemption on stipend paid by the Government? I am not able to understand why there is a 10% TDS when a trainee cannot be a professional. For consultants other than professionals, the TDS rate is either 2% or 1.
Best Regards,
Divakar
From India, Bangalore
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Can you please provide some reference/notification of exemption on stipend paid by the Government? I am not able to understand why there is a 10% TDS when a trainee cannot be a professional. For consultants other than professionals, the TDS rate is either 2% or 1.
Best Regards,
Divakar
From India, Bangalore
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How can trainees be treated as consultants? Upon completion of the training period, they will transition to regular employment. Isn't it? If the stipend is less than 2L per annum, there are no tax implications.
Pon
From India, Lucknow
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Pon
From India, Lucknow
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There was an opinion to treat them as consultants and deduct 10% TDS in the post; hence, I am asking how can you do that?
2.0 Lakh limit comes into picture only if you treat trainee as employees and there is an employer-employee relationship and deduct TDS u/s 192B. Is a trainee under stipend for a specified period an employee for IT purposes?
From India, Bangalore
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2.0 Lakh limit comes into picture only if you treat trainee as employees and there is an employer-employee relationship and deduct TDS u/s 192B. Is a trainee under stipend for a specified period an employee for IT purposes?
From India, Bangalore
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During training in a business enterprise, an employer-employee relationship is developed. There is no specific exemption available for stipend or training allowance, and it will be treated as income under the head of salaries. However, the stipend/scholarship received for meeting the cost of education or research is exempted from income tax. Many court rulings are available for this.
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From India, Lucknow
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From India, Lucknow
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"Employer-employee relationship" is a contractual term that the law recognizes to be in existence when certain conditions are fulfilled. If you have studied the income tax act, especially topics related to salary income, you may appreciate this better.
If we assume that there is an employer-employee relationship in appointing a trainee, all labor laws like EPF/ESI are applicable to them as well.
If there is an employer-employee relationship, then TDS falls under section 192B - there is no confusion whatsoever, and relevant provisions apply.
As far as I know, stipend paid as per the Apprentice Act is exempt from TDS, and one needs to register under this Act and follow the stipulations therein. (I am yet to come across such registrations.)
Usually in the industry, trainees are not under regular employment, and hence it is a contractual understanding, and TDS is deducted as per the provisions contained in section 194C. Trainees are not consultants nor professionals. Since the stipend is a small amount and usually below the taxable limit, even 1% is a huge TDS, and normally refunds need to be claimed.
Best Regards,
Divakar
From India, Bangalore
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If we assume that there is an employer-employee relationship in appointing a trainee, all labor laws like EPF/ESI are applicable to them as well.
If there is an employer-employee relationship, then TDS falls under section 192B - there is no confusion whatsoever, and relevant provisions apply.
As far as I know, stipend paid as per the Apprentice Act is exempt from TDS, and one needs to register under this Act and follow the stipulations therein. (I am yet to come across such registrations.)
Usually in the industry, trainees are not under regular employment, and hence it is a contractual understanding, and TDS is deducted as per the provisions contained in section 194C. Trainees are not consultants nor professionals. Since the stipend is a small amount and usually below the taxable limit, even 1% is a huge TDS, and normally refunds need to be claimed.
Best Regards,
Divakar
From India, Bangalore
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Circular No 1-2018 Processing of income-tax returns under section 143(1) of the Income-tax Act .pdf
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