TDS

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Santosh Kumar Agarwal (Querist)
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02 June 2011 There is a Circular No.4/2008 for TDS on Rent on net rental amount payable (exclusive of service tax). But there is also a Circular that for other section TDS should be inclusive of Service Tax. Pls. give me that Circular number and date.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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02 June 2011 CBDT in this circular has clarified that tax deduction at source under section 194-I of the Income Tax Act, would be required to be made on the amount of rent paid/payable without including the service tax. (Cicular No. 4 dated 28-04-2008). Reason given by CBDT in this circular that service provider only acts as a collection agent for the government.

After ths clarification, every body was of the view that the principal enunciated by ths circular is applicable to all the payments made by the assessee and accordingly no TDS is deductible from on the part of service tax whether it is professional's bill or contractor's bill.

But, to settle the issue, CBDT has issued another clarificatin vide circular F no. 275/73/2007IT(B) dated 30-06-2008 can not be extended to the payment made under section 194-J (Fees for professional and technical services). Therefore, TDS is to be deducted on the gross amount inclusive of service tax where the payment is being made u/s 194-J.

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Santosh Kumar Agarwal

Santosh Kumar Agarwal (Querist)
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03 June 2011 Yes, but on Income Tax site i can't get the circular F no. 275/73/2007IT(B) dated 30-06-2008. Please provide me a link.