In a notification it is clearly stated that while charging tds on rent u/s 194-I...rate of tds must be applied on net amount of rent i.e., [gross rent minus service tax] and not on gross amount. The narration given is that...as service tax charged by the landlord doesnt form part of income of the owner.no need of deducting tds on the service tax amount.
A case was filed in mumbai court that while charging tds on professional services u/s 194-J ..the rate shld be applied on the net amount [total fee charged-service tax] and not gross amount. when above notification was brought into light, the view given by court was that notification states that so only in case of rent.
but the court denied on the base that it is only for in the case of rent(194-I) and for 194-J.
but i couldn understand whats the diff between service tax on rent and professional services? both are not incomes for the service provider as he shld remitt the same to govt revenue?
is there any special reason for the same???
CAclubindia
