For the tds and service both please give me the answer

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 March 2013 if a person has a work of software making,,another person given that person a work of software making and my friends has done his job properly,,,for exp.
a gives a work to b for making a software,,,and b raise a bill to a including service tax. is this correct. and after giving to person a,,a deduct tax (tds)from his bill bt the tds is only 10% and the service tax is 12.3%,,,the difference is 2.3%,,,may i know what should i do 2.3% tax

CA Parul Saxena

CA Parul Saxena (Expert)

04 March 2013 TDS and service tax are two different aspect:-
Bill.............100000
Service tax......12360
Total invoice ....112360
Now Mr. B raised bill of Rs.112360 and Mr. A will make payment as follows:
total amount........112360
(-).....tds........11236
net payment.......101124
In simple words B has charged service tax and A while making payment has deducted TDS....

CA. PIYUSH GOEL

CA. PIYUSH GOEL (Expert)

04 March 2013 dear.

i think you are having some confusion b/w TDS and service tax.

in your case making a software is covered within the provisions of sec. 194C.
however if the person from you are making software is having a professional degree then you should go for a sec. 194J." service of a technical/professional person person.

in both the cases TDS is to be deducted on the whole amount including service tax.

you cannot say that is 12.36% service tax is charged on the bill then deductor should deduct 10% out of such 12.36%. you have to deduct tax on whole amount including service tax.

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