TAX DEDUCTION AT SOURCE

This query is : Resolved

Krupa (Querist)
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07 January 2008 I am a contractor(service). My contractee is making a deduction of 2.266% on total amount payable to me every month on the amount including service tax. my doubt is whether the amount on which TDS Rate is to be applied is inclusive of service tax or not.

CA. Aryendra

CA. Aryendra (Expert)
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07 January 2008 Hi,

TDS Should be deducted on total amount of bill inclusive of service Tax.

In your problem service tax is a expenses for contractee and expenses will not be allowed to him without deduction of Requisite amount of TDS.

And Service Tax is tax on your income your are simply showing seprately in your bill.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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07 January 2008 TDS is on amount including service tax

Amit Sharma

Amit Sharma (Expert)
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08 January 2008 Dear sir,

it should be inclusive of service tax,

if u wanna re-check service tax amount use formula:-

Amount of bill/(1+rate of tax)= SERVICE TAX AMOUNT.