Circular no 4/2008 dated 28-04-2008
This query is : Resolved
10 October 2011
Dear Sir
I have one question about CBDT circular 4/2008 dated 28-04-2008. in this circular CBDT mention that for deducting TDS from rent, service tax not include . Kindly explain me what is the reason behind it.
I have one question about CBDT circular 4/2008 dated 28-04-2008. in this circular CBDT mention that for deducting TDS from rent, service tax not include . Kindly explain me what is the reason behind it.
Hari Wadhwa
(Expert)
10 October 2011
Hi Waseem!!
Your query may be simply replied as the Service tax paid by the tenant to the Landlord or the owner of the asset DOES NOT CONTRIBUTE TO THE INCOME OF THE LANDLORD/owner of the asset. Further, the landlord only acts as a collecting agency on behalf of the Government for collection of service tax. Therefore, CBDT has decided that TDS under sections 194-I of Income-tax Act would be required to be deducted on the amount of rent paid/payable only WITHOUT INCLUDING the AMT of SERVICE TAX.
Your query may be simply replied as the Service tax paid by the tenant to the Landlord or the owner of the asset DOES NOT CONTRIBUTE TO THE INCOME OF THE LANDLORD/owner of the asset. Further, the landlord only acts as a collecting agency on behalf of the Government for collection of service tax. Therefore, CBDT has decided that TDS under sections 194-I of Income-tax Act would be required to be deducted on the amount of rent paid/payable only WITHOUT INCLUDING the AMT of SERVICE TAX.
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