Tds related problem

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 July 2014 if a bill received from a professional for per year charges
fee charges =27,000
service tax =3337
total =30,3337

now we can deduct TDS on 27000 amount or not , if bill amount is annually consideration and total amount is above 30,000.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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05 July 2014 TDS not required to be deducted since the fees excluding service tax is under the threshold limit of Rs 30000/- p.a.

The CBDT has issued Circular No. 1/2014 dated 13.01.2014 pointing out that the Rajasthan High Court has taken the view in CIT(TDS) vs. Rajashthan Urban Infrastructure that if as per the terms of the agreement between the payer and the payee, the amount of service-tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service-tax component u/s 194J of the Act. Pursuant thereto, the CBDT has decided in exercise of powers u/s 119 that wherever the terms of the agreement/ contract between the payer and the payee, the service tax component comprised in the amount is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component.

Complete notification may be seen from below link--

https://law.incometaxindia.gov.in/DIT/Circulars.aspx

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