Tds

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manish sharma (Querist)

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)

27 December 2013 Hi,

If it is to be deducted only on Rent Amount.

Thanks

Ganeshbabu K

Ganeshbabu K (Expert)

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)

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......

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

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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