07 May 2010
The rent for P.Y. was Rs. 10000 p.m. i.e. Rs. 120000 p.a. and the service tax on it @ 10.3 % is Rs. 12360. Total amt. to be paid = Rs. 132360.
TDS in case of rent is only to be deducted on rent amount excluding service tax BUT
While computing the treshhold limit of Rs. 120000 p.a. in case of rent, only rent is to be considered or service tax is also taken into a/c.
07 May 2010
In Income tax Act , Tds threshold limit is given like 20000 in case of 194 C, 120000 in case of 194 I. as per my opinion if amount exceeds threshold limit then tds will be deducted. IF amount is exact threshold limit, then also tds is not to be deducted. other expert's views are solicited.
07 May 2010
I also used to think the way as mentioned by Bansal but the section reads as does not exceed one hundred and twenty thousand rupees which means it should be less than or equal to Rs. 119,999/-.
07 May 2010
Section 194C and Section 194I are not pari meteria. The term "Any amount" has been used in Section 194C whereas "Income by way of rent" has been used in section 194I.
This is the reason, TDS is not deducted on service tax charged on commercial rent, where as TDS is to be deducted on amount including the service tax in cases falling under 194C.
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