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is TDS 194j a double tax

santosh (article) (77 Points)

24 May 2007

can any one please clearify me

1) TDS on a bill of a professional should be charged on the net billing amount or the amount including the service tax. please give reference to section or circular please.

e.g) bill--> 10000, service tax-->1224(old rate).

so tds should be deduted for 10000, or 11224.

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37 Replies

Taroon Sharda (Job) (125 Points)
Replied 25 May 2007

Tds to be deducted on the whole amount i.e including service tax.

(Guest)

Refer Circular No.93. Case law- Accent Cement Ltd V CIT

santosh (article) (77 Points)
Replied 26 May 2007

that is very nice of you thank you

(Guest)

1) TDS on a bill of a professional should be charged on the net billing amount or the amount including the service tax. please give reference to section or circular please.

sanjeev (Manager- Accounts/Tax/Finance) (229 Points)
Replied 08 October 2007

TDS will be deducted on the gross amount of bill inclusive of service tax this is given in dolphy desouza's book in recently asked questions. There is a latest amendment made in this regard by a notification also that is of in auguest 2007.

Anand (481 Points)
Replied 08 October 2007

It is clarified by ICAI also that TDS is to be made on the gross amount and not on the net amount

(Guest)

TDS to be deducted on gross payment i.e. including Service tax not net pmt.

Vk Duggal (320 Points)
Replied 04 December 2007

In tax deduction there is no exemption given under which TDS is not to be deducted on service tax or works contract tax. TDS is to be deducted on whole value of service/work and service tax or any other tax included therein

(Guest)

Then what is the meaning of the words used in Section 194J which are as follows:"Any person......shall,at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or any other mode,whichever is earlier,deduct an amount equal to ten per cent of such sum as income tax on INCOME comprised therein.Does it mean Net Fees only or Service Tax also.Is the amt of Service Tax an INCOME of the professional ? I beg to differ with all the above participants.Please reproduce the amendment or the decision as pointed out.

Vk Duggal (320 Points)
Replied 07 December 2007

CBDT has clarified in its letter No. 275/31/2007 dated 08.08.2007 that TDS is to be deducted on service tax or any tax. The reply was given by CBDT in response to an application filed under RTI by Mr. Vishal V. Sharma seeking clarification whether TDS should be deducted on service tax on rent or not.

(Guest)

You are referring to a letter from CBDT.What is the validity of a letter from CBDT which is extra legal.Can the CBDT go against the Act? The provisions of the Act should be interpreted by the judiciary only.Interpreting the provisions of the Act is not under the perview of RTI. Ok.Mr. Duggal I value your effort of replying to my query.

(Guest)

tds should be deducted opn gross amount not only in professional in other services also.since we are deducting tds only for services rendered we are deduting tax at source thanking you