Tds on rent paid by bpo
This query is : Resolved
07 October 2013
Is BPO (as a Business Service Centre) providing call center services exempt from deducting TDS under section 194-I?
Please reply.
Please reply.
08 October 2013
No it is not exempt.
Message likes :
1 times
08 October 2013
Thank You sir
08 October 2013
ok......
Doubts had cropped up on whether TDS should be calculated on the gross rental, inclusive of service tax or on net rental, excluding the amount paid as service tax. The Central Board of Direct Taxes (CBDT) also got many representations in this regards, following which it has clarified the matter.
“Service tax paid by the tenant doesn’t partake the nature of ‘income’ of the landlord. The landlord only acts as a collecting agency for government for collection of service tax,” the CBDT has clarified. So TDS, under sections 194-I of the Income Tax Act, would be required to be made on the amount of rent paid without including the service tax, it further added. TDS is deducted on rentals which are over Rs 12,000 per month at the rate of 20% for companies and 10% for individuals.
The clarification would help a number of BPO and retail companies which work out of leased offices. Budget 2007-08 had introduced the proposal to levy service tax at the rate of 12.36% on rental of immovable property used for commercial purpose.
You can read the latest case on it:
Serco Bpo Pvt. Ltd.,, Gurgaon vs Department Of Income Tax on 7 December, 2012
https://indiankanoon.org/doc/125497022/
Doubts had cropped up on whether TDS should be calculated on the gross rental, inclusive of service tax or on net rental, excluding the amount paid as service tax. The Central Board of Direct Taxes (CBDT) also got many representations in this regards, following which it has clarified the matter.
“Service tax paid by the tenant doesn’t partake the nature of ‘income’ of the landlord. The landlord only acts as a collecting agency for government for collection of service tax,” the CBDT has clarified. So TDS, under sections 194-I of the Income Tax Act, would be required to be made on the amount of rent paid without including the service tax, it further added. TDS is deducted on rentals which are over Rs 12,000 per month at the rate of 20% for companies and 10% for individuals.
The clarification would help a number of BPO and retail companies which work out of leased offices. Budget 2007-08 had introduced the proposal to levy service tax at the rate of 12.36% on rental of immovable property used for commercial purpose.
You can read the latest case on it:
Serco Bpo Pvt. Ltd.,, Gurgaon vs Department Of Income Tax on 7 December, 2012
https://indiankanoon.org/doc/125497022/
Message likes :
1 times
08 October 2013
Thank you for the material sir.
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
- Off Market debit and credit transaction
- Itr 1 processing
- Showing Gift from relative in ITR for this year
- Reporting Income under Section 44ADA
- ITR returnFY25-26
- ITR selection for salaries and capital gain less than L
- Share accounting-->fifo - capital gain - period as per fifo?
- Short Term Capital gain on shares bought and sold after 2018 onwards
- ITR 2 Short Term gain & Long term gain
- Form 10E u/s 89(1). Need clarification because experts opinions differ !!!!
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
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
