TDS deduction
This query is : Resolved
07 April 2010
Dear Sir/madam
This is chandrsekaran, i have doubt in tds deduction
I received an invoice from my creditor
Total invoice value isRs. 22060/-
Service sales 20000/-
Service Tax 10.3% 2060/-
Total 22060/-
in this what amount i need to deduct the TDS, ie Servie sales value 20000/- or fully invoice value of Rs 22060/-
pls guide me and let me know is there any notification
Regards
Chandrasekaran,
This is chandrsekaran, i have doubt in tds deduction
I received an invoice from my creditor
Total invoice value isRs. 22060/-
Service sales 20000/-
Service Tax 10.3% 2060/-
Total 22060/-
in this what amount i need to deduct the TDS, ie Servie sales value 20000/- or fully invoice value of Rs 22060/-
pls guide me and let me know is there any notification
Regards
Chandrasekaran,
CA Kapil B Gupta
(Expert)
07 April 2010
Full Invoice Value (INR 22,060.00)
07 April 2010
IF YOU ARE BOOKING FULL AMOUNT AS EXP THEN DEDUCT TDS ON ENTIRE AMOUNT. IF YOU ARE BOOKING ONLY RS.20000/- ND TAKING INPUT CREDIT OF SERVICE TAX THEN DEDUCT TDS ON RS 20000/- ONLY.
CA Ashok Kumar Sahu
(Expert)
07 April 2010
AGREE WITH SANJAYJI
27 July 2025
Hi Chandrasekaran,
Regarding TDS deduction on invoices including service tax, the general practice and legal position is:
* **TDS should be deducted only on the service charge portion (excluding service tax)**, i.e., on **₹20,000** in your example, **not on the total invoice amount ₹22,060**.
### Why?
TDS is deducted on the **income portion** payable to the service provider, and **service tax collected is not income of the service provider but a liability they pass to the government**. So it is excluded from the TDS base.
---
### Legal backing:
* **CBDT Circular No. 715 dated 16-10-1994** clarifies that tax is to be deducted on the amount payable to the service provider exclusive of service tax.
* Also, **Section 194J(1)** (for professional fees etc.) and **Section 194C(1)** (for contracts) specify TDS on "sum credited or paid" for services, which excludes taxes collected on behalf of government.
---
### Summary for you:
| Invoice Component | TDS Deductible Amount |
| ------------------- | ------------------------------- |
| Service Sales | ₹20,000 |
| Service Tax (10.3%) | ₹2,060 (excluded from TDS base) |
| Total Invoice | ₹22,060 |
**TDS will be deducted on ₹20,000 only.**
---
If you want, I can provide a link to the official CBDT circular or relevant notifications. Would you like that?
Regarding TDS deduction on invoices including service tax, the general practice and legal position is:
* **TDS should be deducted only on the service charge portion (excluding service tax)**, i.e., on **₹20,000** in your example, **not on the total invoice amount ₹22,060**.
### Why?
TDS is deducted on the **income portion** payable to the service provider, and **service tax collected is not income of the service provider but a liability they pass to the government**. So it is excluded from the TDS base.
---
### Legal backing:
* **CBDT Circular No. 715 dated 16-10-1994** clarifies that tax is to be deducted on the amount payable to the service provider exclusive of service tax.
* Also, **Section 194J(1)** (for professional fees etc.) and **Section 194C(1)** (for contracts) specify TDS on "sum credited or paid" for services, which excludes taxes collected on behalf of government.
---
### Summary for you:
| Invoice Component | TDS Deductible Amount |
| ------------------- | ------------------------------- |
| Service Sales | ₹20,000 |
| Service Tax (10.3%) | ₹2,060 (excluded from TDS base) |
| Total Invoice | ₹22,060 |
**TDS will be deducted on ₹20,000 only.**
---
If you want, I can provide a link to the official CBDT circular or relevant notifications. Would you like that?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Capital Gail Exemption Certificate
- Unable to File TDS Q2 Return – New TRACES Portal Error
- MSME disclosure and disallowance
- Issuing of delivery challan by seller of goods
- Transfer of Physical Stock Between Two Proprietorship Concerns
- EPF ECR NEW RULES Sep 17th 2026
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
