Dear Seniors,
One of our esteemed manager is attaining retirement age by this 31st. We would like to retain his services. I have few clarifications on this.
Can we continue his role as an employee or should we relieve him & re-hire him as a consultant.
If we can continue as an employee, what are the conditions & exceptions like PF, PT, TDS etc.
If we re-hire him as an consultant how do we pay his remuneration.
Kindly enlighten me on this seniors.
From India, Madras
1One of our esteemed manager is attaining retirement age by this 31st. We would like to retain his services. I have few clarifications on this.
Can we continue his role as an employee or should we relieve him & re-hire him as a consultant.
If we can continue as an employee, what are the conditions & exceptions like PF, PT, TDS etc.
If we re-hire him as an consultant how do we pay his remuneration.
Kindly enlighten me on this seniors.
From India, Madras
Dear Mahesh,
You may continue to keep on roll the retired employee. There is no prescribed age limit for the retirement. However, after 58, there will not be PF deduction. About PT, please check rules of your state government. TDS deductions will be like any other employee.
If you hire his services as consultant then TDS @ 10% will be deducted u/s 194J of IT Act 1961. However, in this case his tax deductions will go up and he will have to wait for the IT refund. Why to do that?
Secondly, for consultant you cannot have regular office timing. Therefore, it is better to keep him as normal employee.
Thanks,
Dinesh V Divekar
From India, Bangalore
You may continue to keep on roll the retired employee. There is no prescribed age limit for the retirement. However, after 58, there will not be PF deduction. About PT, please check rules of your state government. TDS deductions will be like any other employee.
If you hire his services as consultant then TDS @ 10% will be deducted u/s 194J of IT Act 1961. However, in this case his tax deductions will go up and he will have to wait for the IT refund. Why to do that?
Secondly, for consultant you cannot have regular office timing. Therefore, it is better to keep him as normal employee.
Thanks,
Dinesh V Divekar
From India, Bangalore
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