Tds deduction under section 194 c (Income Tax)

This query is : Resolved

Arun Bansal

( Author )
04 July 2012

PLEASE CLEARIFY THAT TDS IS APPLICABLE ON CONTRACTOR BILL INCLUDING SERVICE TAX AMOUNT OR BASIC AMOUNT OF THE BILL(EXCLUDING SERVICE TAX AMOUNT)

CMA. CS. Sanjay Gupta

( Expert )
04 July 2012

TDS to be deducted on amount including service tax...

As per Circular No.4/2008 dated 28.4.2008, it was clarified that TDS on rental payments would be required to be made only on the basic rental amount without including service tax. In other words, TDS should not be made on the service tax portion of the rent. However, this analogy is not applicable to TDS under other sections.

In short--
For 194I - Deduct TDS on amount excluding service tax.
For other section - Deduct TDS on amount including service tax.