TDS deduction inclusive of Service tax.
This query is : Resolved
CA Aravind I
(Querist)
29 March 2011
There is a practice of deducting tax at source inclusive of Service tax component is it correct doing so? whether such a deduction amounts to double taxation as what will be the tax bifurcation in such a case?
29 March 2011
Only in case of Rental payment under 194I : The department has clarified that TDS should be deducted only on the rent (excluding service tax), whereas in all other cases TDS is applied on the gross amount(including service tax)
29 March 2011
Regarding double taxation : I don't think it amounts to double taxation as its only a collection of advance tax (on deductee's behalf), for which he will get due credit in his final ITR. The customer will be assessed on the base of his income (which is based on his net turnover).
This can only leads to cash flow problem for an assessee as he will get lesser amount in hand from the customer resulting a working capital woes.
This can only leads to cash flow problem for an assessee as he will get lesser amount in hand from the customer resulting a working capital woes.
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CA.ViVeK M ACA
(Expert)
29 March 2011
other than rent, TDS have to be deducted inclusive of service tax and for rent transaction TDS have to be calculated other than service tax figure
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