Tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 September 2011 Sir we are paying for Professional services monthly ,we have to deduct TDS or not but the company is submitting service tax bill.so we are minus service tax amount and deduct TDS pls help in this regard

CA. Rajesh P. Ahir

CA. Rajesh P. Ahir (Expert)
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19 September 2011 DEAR,
AS PER SECTION 194J TDS IS TO BE DEDUCTED ON GROSS AMOUNT OF BILL (i.e. INCLUDING SERVICE TAX)

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 September 2011 TDS to be deducted u/s 194J @10% on Crossing the Threshold limit of Rs 30000/- p.a.

TDS should be deducted on amount inclusive of service tax.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 September 2011 As per Circular No.4/2008 dated 28.4.2008, it was clarified that TDS on rental payments would be required to be made only on the basic rental amount without including service tax. In other words, TDS should not be made on the service tax portion of the rent. However, this analogy is not applicable to TDS under other sections.

In short--
For 194I - Deduct TDS on amount excluding service tax.
For other section - Deduct TDS on amount including service tax.

Also see the attached clarification in this regard.