Service tax

Dear Sarita

TDS is to be deducted on amount excluding service tax....

IN your example TDS is to be deducted on 5000/-

dear saloni thanks but  Rs5618 (inclusive of all taxes) is mention on contract and bill shows separately like fees-Rs.5000 s.tax-618 and total value-5618.now what to do?????

Hi Sarita,

To my understanding if the Service Tax Componenet is mentioned seperately on the invoice then TDS should be deducted on the Rs. 5000/- otherwise on full amount.

OR

U Can folllow  "Thumb rule"

"IN CASE OF CONFUSION DEDUCT TDS ON TOTAL AMOUNT"

TDS is to be deducted on amount Excluding Service Tax .

Refer latest circular as below issued by CBEC

Circular No.01/2014

also CIT(TDS) Jaipur vs Rajasthan Urban Infrastructure (Income-tax Appeal No.235, 222, 238 and 239/2011),