Tds

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manish sharma (Querist)
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27 December 2013 sir ,
I have a Problem
my Company Pays Rent of 200000, And i m Little bit of Confused In the matter of TDS.
Tell me that If i will deduct Tds On 200000(including service tax) or on 178000(Excluding Service Tax)..
Please Suggest me Sir???

@VaibhavJ

@VaibhavJ (Expert)
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27 December 2013 Hi,

If it is to be deducted only on Rent Amount.

Thanks

Ganeshbabu K

Ganeshbabu K (Expert)
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27 December 2013 when deducting TDS under section 194I , you have to deduct TDS excluding service tax,,

however for deducting TDS for other sections TDS is required to be done on including servicetax
.
.
To know why it is like this Refer my file which is explained in a detailed manner along with notifications issued by CBDT
.
.
Refer
.
.
https://www.caclubindia.com/share_files/tds-on-service-tax-on-all-payments-except-rent-56695.asp

manish sharma

manish sharma (Querist)
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06 January 2014 If a Company is Leveying TDS On Gross Amount i.e ( Tax + Service tax),
So as an Auditor What Will be My Reaction???
Please Tell me Sir......

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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27 July 2025 Great question!

If the company is **deducting TDS on the gross amount including service tax** (i.e., on rent + service tax) under **Section 194I (Rent)**, here’s what you, as an auditor, should consider:

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### What the law says:

* **Section 194I (Rent)**: TDS is to be deducted **only on the rent amount excluding service tax**.
* **Service tax** is not part of the rent, it is a separate statutory levy, so no TDS on that.

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### As an auditor, your reaction:

1. **Inform the management** that TDS should be deducted only on the rent amount excluding service tax.
2. **Recommend correction**:

* For future payments, deduct TDS excluding service tax.
* If excess TDS has been deducted earlier, suggest rectification or adjustments with the tax authorities.
3. **Check for any impact on accounts**:

* Verify if excess TDS has been deposited and the deductee has been issued a correct TDS certificate.
4. **Note in audit report/comments**:

* Highlight the non-compliance and suggest compliance for future periods.

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### Why is it important?

* Deducting TDS on service tax leads to **over-deduction**.
* Deductee may face difficulty in claiming credit for excess TDS.
* Non-compliance with correct provisions may attract scrutiny from tax authorities.

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