A bill received from an agency specifying the details of professional services availed which has been summarized as follows:
Professional services : Rs.28000
Service Tax : Rs. 3460
Total : Rs.31,460
Should TDS be deducted on this transaction ? Is Service Tax portion to be considered while examining the threshold limit for TDS applicability? Comment in the light of CBDT circular on 13.01.2014.
As per my opinion no TDS is to be deducted on this transaction as 28000 is below the threshold limit.
as per that circular we have to not consider service tax component while deducting tax so that may very well extend to the threshold limit as the limit is for such sum paid as professional fees and this circular clarifies that service tax is not part of such sum paid as professional fees.
TDS is not applicable on service tax portion.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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