Consideration of Section 192 vs Section 194 J while drafting Employment Contract

January 27, 2023

Section 192 of the Income Tax Act of India deals with the TDS (Tax Deducted at Source) on salary. Section 194J of the Act deals with TDS on professional or technical fees, and Section 194M deals with TDS on certain specified payments made to a resident.

When drafting an employment contract, it is important to consider these sections to ensure compliance with the tax laws of India. The contract should clearly specify the terms of remuneration, including any bonuses, commissions, or other forms of compensation, and state the deductions that will be made for TDS. The contract should also include provisions for the employee to provide the necessary documentation, such as PAN (Permanent Account Number), to the employer for TDS purposes.

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Mr. Nipun Khanna is the founder of this firm- Startup Solicitors LLP