28 July 2008
“Service tax paid by the tenant does not partake the nature of income of the landlord. The landlord only acts as a collecting agency for Government for collection of service tax. Therefore, it has been decided that tax deduction at source (TDS) under Sections 194-I of Income-Tax Act would be required to be made on the amount of rent paid/payable without including the service tax,” the Central Board of Direct Taxes (CBDT) has now clarified.
Renting of commercial space was brought under the service tax net in Finance Bill 2007.
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