Diffrence between service tax & tds
This query is : Resolved
04 November 2011
service tax lavies on provide of service but,tds lavies on?
04 November 2011
Service tax is, as the name suggests, a tax on Services. It is a tax levied on the
transaction of certain services specified by the Central Government under the Finance
Act, 1994.
It is an indirect tax (akin to Excise Duty or Sales Tax) which means that normally, the
service provider pays the tax and recovers the amount from the recipient of taxable
service.
TDS is one of the modes of collection of taxes, by which a certain percentage of amounts are deducted by a person at the time of making/crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government account. It is similar to "pay as you earn" scheme also known as Withholding Tax in many other countries, one of the countries is USA. The concept of TDS envisages the principle of "pay as you earn". It facilitates sharing of responsibility of tax collection between the deductor and the tax administration. It ensures regular inflow of cash resources to the Government. It acts as a powerful instrument to prevent tax evasion as well as expands the tax net.
For details check out below links---
For Service Tax--
https://www.caclubindia.com/share_files/faq-on-service-tax--41965.asp
For TDS--
https://www.caclubindia.com/articles/all-you-want-to-know-about-tds-7882.asp
transaction of certain services specified by the Central Government under the Finance
Act, 1994.
It is an indirect tax (akin to Excise Duty or Sales Tax) which means that normally, the
service provider pays the tax and recovers the amount from the recipient of taxable
service.
TDS is one of the modes of collection of taxes, by which a certain percentage of amounts are deducted by a person at the time of making/crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government account. It is similar to "pay as you earn" scheme also known as Withholding Tax in many other countries, one of the countries is USA. The concept of TDS envisages the principle of "pay as you earn". It facilitates sharing of responsibility of tax collection between the deductor and the tax administration. It ensures regular inflow of cash resources to the Government. It acts as a powerful instrument to prevent tax evasion as well as expands the tax net.
For details check out below links---
For Service Tax--
https://www.caclubindia.com/share_files/faq-on-service-tax--41965.asp
For TDS--
https://www.caclubindia.com/articles/all-you-want-to-know-about-tds-7882.asp
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