TDS U/s 194C
This query is : Resolved
17 March 2011
Whether TDS U/S 194C is deductable on amount inclusive of service tax? Please provide any reference.
17 March 2011
Yes. Income tax is to be deducted on the gross amount inclusive of service tax.
17 March 2011
TDS will be deducted on value inclusive of service tax.
As per Circular No.4/2008 dated 28.4.2008, it was clarified that TDS on rental payments would be required to be made only on the basic rental amount without including service tax. In other words, TDS should not be made on the service tax portion of the rent. However, this analogy is not applicable to TDS under other sections. Which means TDS to be deducted on amount including service tax in case of other sections.
As per Circular No.4/2008 dated 28.4.2008, it was clarified that TDS on rental payments would be required to be made only on the basic rental amount without including service tax. In other words, TDS should not be made on the service tax portion of the rent. However, this analogy is not applicable to TDS under other sections. Which means TDS to be deducted on amount including service tax in case of other sections.
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