Any income by way of rent

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Ref : circular F no. 275/73/2007IT(B) dated 30-06-2008  &  circular no. 4 dated 28-04-2008

What is "any income by way of rent"  for the purpose of TDS on Service Tax

Is it Rent Receivable Less:30% Less : applicable municiple Taxes
or
Gross Rent Receipts

& Is it Gross rent Payable or
Rent Payable Less:30% Less: applicable Municiple Taxes

Thanks & Regards

Ambrish

 

 

Replies (7)

TDS is on gross rent

Gross Rent Reciepts

TDS will be deducted on Gross rent received but excluding service tax. This is because as per section 194I tds shall be deducted on "any income by way of rent" and service tax is not an income of Landlord.

TDS shall be deducted frm gross amount


 

That was a text book reply.. thats for that, but I had the query with reference to the two conflicting circulars issued by CBDT..

At one end, it exempt ST for calculating TDS (stating ST is not an Income at Receipients' end - as the basis of granting exemption for  calculating TDS) 

while in the second case, they been silent or rather DUMB, creating an issue for Judicial Scrutinee. So I asked any such explaination from the tax practicionears. 

Boss everything is written in text book only and in practicle life also we have to refer them, we cannot write our own Act. This is also industry practice and followed by everyone. I am providing you the matter published in the website of ICAI (WIRC):

 

DEDUCTION OF TAX AT SOURCE ON SERVICE TAX – PRESS RELEASE {172 TAXMAN (ST.) 6}
Circular F. No 275/73/2007 – IT (B) Dated 30/06/2008 Clarified that the scope of the circular No. 4/2008 dated April 28, 2008 should not be extended to the payment made u/s 194J. CBDT earlier issued a clarification that, no TDS will be applicable on service tax portion while making payment of rent u/s. 194I of the Act. The board has now clarified that the payment made u/s 194I defer significantly from the payment made u/s. 194J in the way that in the case of 194 I ,TDS has to be deducted on any income paid as rent. However, in the case of section 194J TDS has to be deducted on any sum paid as professional and technical fees. The Board has decided to exclude TDS on Service Tax component on rental payment because it was construed that service tax payment cannot be regarded as income of the land lord. Since 194J covers any sum paid, the board has decided not to extend the scope of Circular No. 4/ 2008 dated 28 April 2008 to such payment u/s. 194J.
 

 

Those who wants to disagree on this should come with facts only and debate on the same.
 

Wel explained by Ravi.......

Incase of Rent service tax is not included but in other case tds is tobe deduct on the amount including service tax.


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