Tds on security
Querist : Anonymous
And
Under which section TDS Will be deducted ?
When security provider is Proprietor .
Security provider charging 12.36% service Tax his bill.
Kindly explain.......
Querist : Anonymous
Thanks a Ton....
Querist : Anonymous
When Security Provider submit bill as Basis Amount * Service Tax 3.09% then may I pass Service Tax on RCM A/c Entry by 3.09% Amount ?
for Example Service Bill Amount Rs.19546 & On that Service Tax - 3.09% Rs. 604 in that case what will be the entry in Service Tax RCM A/c & @ What Amount.
Kindly Explain.. Its Urgent please.
Querist : Anonymous
I want to pay security bill & I will Deduct TDS under 94C .Please inform me that TDS 1% will be deducted on Gross Total OR only on Basic Amount ? for Example - Basic Amount Rs.19546.00 + Service Tax - 604 = 20150 So TDS on Rs.19546 OR TDS on Rs.20150.00 ??
Kindly Explain....
Querist : Anonymous
While Making working of Service Tax RCM A/C I have to Calculate the 75% & 25% of Service Tax on Basic amount or on Gross Amount ? when Service Provider submit the bill of Security. for Example :- Basic Amount Rs.19546 *12.36%=2415*75%= 1811 & 2415*25%=604 OR
On Gross Amount of Bill for Rs.20150*12.36%=2490*75%=1968 & 2490*25%=622.
Kindly Explain.......
---
### 1. **TDS on Security Service Payment**
* **Section:**
TDS is deducted under **Section 194C** (Payment to Contractors).
* **Rate of TDS:**
For security services, the rate is **1%** if payment is made to an individual or proprietor (otherwise 2% for others).
* **TDS Base Amount:**
TDS should be deducted on the **basic amount exclusive of service tax**.
This means **do not deduct TDS on the service tax portion**.
---
### 2. **Service Tax and Reverse Charge Mechanism (RCM) on Security Services**
* Security services often attract **service tax**, and sometimes under RCM, the recipient has to pay service tax on a portion of the service (commonly 25% or 3.09% as per old slabs).
* When you receive a bill with service tax charged by the security service provider, verify if service tax is on **full amount or partial (like 75%/25%)** split.
* **Your example:**
* Basic amount = Rs. 19,546
* Service tax = Rs. 604 (3.09%)
* Total bill = Rs. 20,150
* **Accounting for Service Tax under RCM:**
* You will credit the basic amount to the security service provider.
* Service tax under RCM is to be accounted separately (e.g., debit input service tax credit and credit service tax liability).
* Regarding the 75% / 25% split of service tax (old rule):
* Calculate **75% of service tax on basic amount** as paid to the service provider (reflected in the bill).
* Remaining **25% under RCM is paid by you** directly to the government and accounted in your books.
---
### 3. **Your Questions Clarified**
| Query | Answer |
| ---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ |
| On what amount to deduct TDS — Basic or Gross? | Deduct TDS on **Basic amount only**, exclude service tax. |
| How to pass entry for Service Tax RCM? | Debit Input Service Tax Credit and Credit Service Tax Payable on the **RCM portion** (usually 25% of service tax). |
| How to calculate 75% and 25% of service tax? | Calculate both percentages **on the basic amount** (not on gross). |
---
### Sample TDS Calculation on your example:
* Basic Amount = Rs. 19,546
* Service Tax = Rs. 604 (ignore for TDS)
* TDS @ 1% on 19,546 = Rs. 195.46 (deduct and deposit)
---
### Summary:
* Deduct TDS under Section 194C @1% on basic service amount only.
* Service tax is excluded from TDS calculation.
* Pay service tax as per invoice and handle RCM portion separately.
* Follow 75%/25% split on service tax based on basic amount for accounting.
---
If you want, I can help draft journal entries for this scenario. Would you like that?
Click here to login now
Similar Resolved Queries
- Payment for sale in March and Sale deed registration to be done in April
- GST APPEAL ITC
- Treatment of TDS under Section 194-IA in case of cancelled property transaction
- PTRC PAYMENT & RETURN FILING (Annually)
- Unable to file 3B monthly return
- TDS U/S 194S VDA
- Surcharge on discretionary AOP/TRUST for AY 25-26
- REGARDING ITR OF TRUST
- Missing tan number searach procedure in income tax portal
- Tds provison applicable on remenuration and interest for partners f.y.25-26
- Query regarding applicability of UDIN on MCA forms signed using DSC by a Chartered Accountant
- GST ON PERSONAL MOTORCAR SOLD
- Cash gift by grand mother to her grand daughter
- APPLICABILITY OF RCM ON MAN POWER SUPPLY BY UN REGISTERED PERSON TO REGISTERED PERSON.
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Spice form, ? mark comes in address
- Tds on GST in connection with sale to public company
- B2B Amendment
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
