If you are employed in an organization on contract basis, the company will deduct the TDS for the financial year and TDS Certificate (Form 16A) will be sent to you.
If you are eligible, you can file your tax returns and can get the amount duly deducted from you.
Employees who work on contractual basis are not eligible for all benefits such as allowances, pension income, travel allowance etc available for the permanent employees.
Last date to file income tax returns is August 5, 2016.
Which ITR Form Should Contract Employee Use to file returns?
Contact employees and permanent employees differ on roles of the company, the ITR forms also differ. Tax Deducted at Source (TDS) for contract employee will be deducted at flat rate of 10 per cent. Contract Employee should file ITR4 when filing his tax returns.
The ITR-4 form is applicable for individuals who have income from proprietary business or are carrying on a profession.
Such employee should note that their income will not be taxed under Income from salaries. So they are not supposed to file ITR 1/ITR2 form.
Contract Employee should file their tax returns under head Income from Business/Profession.
Such individuals will be issued form 16A, while permanent employees will receive form 16.
Individuals who have filed their returns electronically should e verify their returns. Tax payers who have filed manually, should send the ITR-V copy to CPC Bangalore with 120 days of filing returns.