25 May 2011
U HAVE NOT STATED THE RELEVANT SECTION UNDER WHICH TAX IS TO BE DEDUCTED THERE ARE TWO CLARIFICATIONS FM CBDT 1.Service tax paid by the tenant does not partake the nature of income of the landlord. The landlord only acts as a collecting agency for Government for collection of service tax. Therefore it has been decided that tax deduction at source (TDS) under sections 194-I of Income Tax Act would be required to be made on the amount of rent paid/payable without including the service tax.—Vide Circular No. 4/2008, dt. 28-4-2008. 2.The payments made under section 194-I differ significantly from payment made under sec-tion 194J in the way that in the case of 194-I TDS has to be deducted on any income paid as rent. However, in the case of section 194J TDS has to be deducted on any sum paid as professional and technical fees. The Board had decided to exclude TDS on service tax component on rental payment because it was construed that service tax payment cannot be regarded as income of the landlord. Since section 194J covers any sum paid, therefore the board has decided not to extend the scope of Circular No. 4/2008, dated 28-4-2008 to such payment under section 194J.—Vide Circular F.No. 275/73/ 2007-IT(B), dt. 30-6-2008.
26 May 2011
the stay u are talking abt imight be on leviability of service tax on renting of immovable property that is another matter so far as tax deduction ois concerned there is no stay
26 May 2011
other cases where service tax may be leviable are covered by section 194C and 194J in both these cases as per present clarifiactions tax will be deducted inclusive of service tax
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