Consultancy Agreement Template (India) — Free Format
A consultancy agreement engages an independent professional or firm to advise or deliver work for a fee, without creating an employment relationship. This template covers scope, fees, GST and TDS, IP ownership, confidentiality and termination for consultants engaged by Indian businesses.
Stamp, registration and e-sign at a glance
The three things to settle before anyone signs this agreement in India.
Payable under the stamp law of the state where it is signed; rates vary by state. Unstamped, it cannot be used as evidence until duty and penalty are paid.
Check your state's rateRegistration is not required.
This agreement can be signed electronically with Aadhaar eSign or a DSC under the Information Technology Act, 2000. Electronic signatures listed in the Act's Second Schedule carry a presumption of reliability.
What cannot be e-signedWhat is a Consultancy Agreement?
A consultancy agreement treats the consultant as an independent contractor responsible for their own taxes, tools and working methods. Courts look at the real relationship — control, integration and economic dependence — so the way the engagement runs matters as much as the label.
When to use it
- Retaining an adviser, retired executive or specialist on a monthly retainer
- Engaging a consulting firm for a defined project
- Hiring a professional who works for several clients
Key clauses checklist
Make sure your draft covers each of these. Linked clauses open a sample wording with drafting tips.
- Scope of services and independence
- Fees, GST and TDS Sample clause
- IP assignment Sample clause
- Confidentiality Sample clause
- Non-solicitation Sample clause
- Termination Sample clause
- Limitation of liability Sample clause
Indian law notes
Misclassification risk
If the company controls when, where and how the consultant works like an employee, authorities and courts may treat the relationship as employment, with provident fund, gratuity and other consequences. Keep control over outcomes, not methods.
Tax deductions
Fees for professional or technical services usually attract TDS under the Income-tax Act, and the consultant may need to charge GST if registered. Fix who bears what in the fees clause.
CONSULTANCY AGREEMENT This Consultancy Agreement is made on [Date] between [Company Name], [Address] (the "Company") and [Consultant Name / Firm], PAN [PAN], [Address] (the "Consultant"). 1. SERVICES The Consultant shall provide the services described in Schedule 1 (the "Services") from [Start Date] to [End Date]. 2. INDEPENDENT CONTRACTOR The Consultant is an independent contractor and not an employee. The Consultant decides how to perform the Services, provides their own equipment, may work for other clients that do not compete with the Company, and is responsible for their own taxes and statutory contributions. 3. FEES 3.1 The Company shall pay a fee of Rs. [Amount] [per month / on milestones in Schedule 1], plus GST if applicable, against a valid invoice. 3.2 The Company will deduct TDS as required by law and issue TDS certificates. 3.3 Pre-approved out-of-pocket expenses will be reimbursed against receipts. 4. INTELLECTUAL PROPERTY All deliverables, reports and materials created for the Company under this Agreement, once paid for, belong to the Company, and the Consultant assigns all rights in them to the Company. The Consultant keeps general skills and know-how. 5. CONFIDENTIALITY The Consultant shall keep the Company's confidential information secret during and for [3] years after this Agreement, and return it on request. 6. CONFLICTS The Consultant shall disclose any conflict of interest and shall not, during the term, provide similar services to a direct competitor of the Company without written consent. 7. NON-SOLICITATION During the term and for [6] months after, the Consultant shall not solicit any Company employee to leave the Company. 8. LIABILITY The Consultant's total liability under this Agreement is limited to the fees paid in the [6] months before the claim, except for breach of confidentiality, IP infringement or fraud. 9. TERMINATION Either party may terminate on [30] days' written notice. The Company may terminate immediately for material breach. The Company shall pay fees for Services performed up to termination. 10. GOVERNING LAW AND DISPUTES Indian law applies. Disputes shall be referred to arbitration by a sole arbitrator under the Arbitration and Conciliation Act, 1996, seated at [City]. Schedule 1 – Services, deliverables and fees: [describe] For the Company: ____________ Consultant: ____________
Replace every [placeholder] and delete options that do not apply. Estimate TDS on consultancy fees
How to execute it
From blank template to a signed, stamped and stored contract.
Define deliverables and fees in the schedule.
Check that day-to-day working arrangements match independent-contractor status.
Confirm GST registration and TDS rate for the consultant.
Stamp and sign the agreement, ideally with Aadhaar eSign.
Track the end date and renew or close formally.
Frequently asked questions
Can a consultant be treated as an employee?
Yes, if the real relationship looks like employment — fixed hours, supervision, integration into the team. Labels alone do not decide it.
Who owns work created by a consultant?
Under the Copyright Act, 1957 the author is usually the first owner unless there is a written assignment. Include an IP assignment clause.
Is GST payable on consultancy fees?
Usually yes if the consultant is registered for GST. The agreement should state that fees are exclusive of GST.
Related templates
Stop emailing Word files around
Turn this format into an approved template, collect approvals, buy e-stamp paper, send it for Aadhaar eSign and get reminded before it renews.