What will be TDS on professional service

What will be TDS on professional service

Hi i am joing a firm as a consultant. will present GSSTinvoice for services as a salary . i have requestion for take home salary of 3 lakh after all deductions like GST n TDS. i want to clarify what is TDS libabilty for me if i work for a company as a consultans on GST.

Asked 10 hours ago in GST

my company offered me this structure. Calculation for contract employment is as follows:-


Basic: 3,00,000.00
GST 18%: 54000
Total: 354000
TDS 1% :3000
PAYMENT: 351000

my understanding is my salary after all will be 297000 per month as a consultant.

points :
1) Above is TDS calculation in case of Individual GST invoice and in case of Company GST invoice TDS will be deducted at 2%.
2) in contract aggrement its wrtten : a)The remuneration payable to the Consultant by the Company shall be Rs. /- plus applicable GST.
b)10% TDS (Tax Deducted at Source) will be deducted as per applicable laws

it it correct our i will end up paying more tax during ITR filiing at the end of year.

i had asked was i need take home salary to be 300000L rest deduction you take care.

my designation in contract is :
CONSULTANT AGREEMENT
1.1 Services: Consultant shall provide services of a Designation at locations.
3.1 Compensation & Others: The Company shall pay to Consultant a Fixed
Contractual fee of Amt (Only).

3.2 Remuneration: The compensation for the Professional Services of the Consultant will be paid as Professional Fees in accordance with the Annexure A. The Consultant will be responsible to raise a GST invoice including 18% GST on Professional Fees to the Company on the first day of each month for the Professional Services rendered in the previous month.

The Consultant is responsible to deposit the GST collected by him from the Company and file his GST Returns for his own GST number.

With the exception of the obligation to withhold tax, the Company, however, assumes no responsibility for the consultant personal tax affairs, and his tax liability in respect of his remuneration, which is entirely his responsibility.

Asked 9 hours ago

Dear Sir,

Hope you are doing well.

The contract says 10% TDS, but the illustration shows 1% TDS. Which is correct?

If you are working as a GST-registered consultant and raising a monthly invoice to the Company, the payment mechanism generally works as follows:

Professional Fees: This is your agreed consulting fee (e.g., ₹3,00,000 per month). This amount is considered your professional income.

GST: You will charge GST at the applicable rate (currently 18%) on your professional fees. GST is not your income. You collect it from the Company and later deposit it with the Government after adjusting any eligible input tax credit.

TDS: The Company will deduct TDS on your professional fees (generally excluding the GST amount if GST is shown separately in the invoice) and deposit it with the Income Tax Department against your PAN. This TDS is not an additional cost to you; it is an advance payment of your income tax and can be claimed as a tax credit when you file your income tax return.

Example:

If your agreed professional fee is ₹3,00,000 per month, you will raise an invoice for ₹3,54,000, comprising ₹3,00,000 as professional fees and ₹54,000 as GST. If the applicable TDS rate is 10%, the Company will deduct ₹30,000 as TDS and pay you ₹3,24,000. Out of this amount, ₹54,000 represents GST, which you are required to deposit with the Government, while ₹30,000 has already been deposited by the Company as TDS against your PAN. Accordingly, your professional income remains ₹3,00,000, and the TDS deducted will be available as a tax credit while filing your income tax return.

Considering the facts involved, it would be advisable to schedule a telephonic consultation for a detailed discussion and a proper evaluation of the tax implications.

Thanks & Regards,

Payal Chhajed

CA, Mumbai

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Dear Querist,

TDS should normally be deducted at 10% under Section 194J on the professional fee of ₹3,00,000, excluding GST if shown separately. Therefore, 1% TDS does not appear correct merely because you are an individual consultant.

TDS is only an advance tax credit; your final income-tax liability will be calculated while filing the ITR. Ask the company to confirm the applicable TDS section and renegotiate the fee if ₹3,00,000 net take-home was agreed.

For a more detailed review of your case, you may book a phone consultation.

CA Shubham Goyal

Shubham Goyal

CA, Delhi

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