Tds
This query is : Resolved
14 October 2011
On which amount TDS to be deducted including service tax or excluding service tax
Preety Parik
(Expert)
14 October 2011
Tax has to be deducted on gross amount inclusive of service tax. Only for Payments under Sec.194I i.e rent, Tax is to be deducted on amount excluding Service Tax.
Refer circular 4/2008 dt 29/4/2008
Refer circular 4/2008 dt 29/4/2008
CA SUMiT PATWARi
(Expert)
14 October 2011
CBDT has clarified that no tds would be deducted on service tax component if payment is made under section 194I i.e. Rent .
Thus tds wud be deducted on actual amount of rent and not on service tax.
Similar is the case u/s 194J, but Cbdt has clearly stated that the clarification is only for rent u/s 194I & not for professional fees.
Section 194J reads as under (Extract)
(1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of-
(a) fees for professional services, or
(b) fees for technical services,...
shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque of draft or by any other mode, whichever is earlier, deduct......
As the section contains words "any sum", TDS is to be made on gross amount inclusive of service tax.
Thus tds wud be deducted on actual amount of rent and not on service tax.
Similar is the case u/s 194J, but Cbdt has clearly stated that the clarification is only for rent u/s 194I & not for professional fees.
Section 194J reads as under (Extract)
(1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of-
(a) fees for professional services, or
(b) fees for technical services,...
shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque of draft or by any other mode, whichever is earlier, deduct......
As the section contains words "any sum", TDS is to be made on gross amount inclusive of service tax.
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