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Tds for audit fees inclusive of service tax

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Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2013 Our Company is paying Internal Audit fees as below:
Audit Fees 30,000
Service Tax@12.36% 3708
Total Bill 33,708
TDS under Sec 194 I is to be deducted on Rs.30,000 or Rs.33,708.If it is to be deducted on 33,708 then at the time of filing TDS Statement, Amount paid is to be shown as Rs 30,000 or Rs 33,708.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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22 August 2013 TDS to be deducted u/s 194J on Rs 33,708/ @10%.

TDS to be deducted on Gross Bill amount including service Tax.

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.

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