Tds

TDS will be deducted on Rs. 175377.

Sushant ji,

 

TDS will be deducted on above case on Rs.1,75,377/- as correctly said by CA. Garav Gulati. 

TDS Deductible is on Biiled Amount. If Party had given the Bill or invoice to you then deduct tds amount on gross payable amount. i.e. 175377/-

Because you have recoreded some amount already paid and some payable to him in the event of Rent on Machinery.

So You should must to deduct  2% TDS  on Amount of Rs. 175377/-  u/s. 194I.

 

 

 

 

I thnk it ll b deducted on1,59,000 in acccordance with the circular issued by CBDT, which states, in case of TDS u/s 194-I, TDS is to be dedcuted on amount excluding service tax component.

 

Plz correct me if m wrng.

CBDT circular can be viewed from the following link:

https://www.fam-is.com/Incometax_forms/CBDT%20Circular%20on%20194I.pdf

Sumit is right!

If the TDS is made U/s 194 I, the TDS is made on "Income by way of rent"

So, the TDS U/s 194 I will be  on 150000/-.

But you have to clarify whether there is any contract element.

agree with sumit,

 

actually I overread the word Machinery Hire charges which comes under 194I. TDS will be deducted on 159000/-

 

 

Here in the bill service tax is charged on Rs.1,59,000/- (rent + operator allowance). So, machinery + labour is hired.

Therefore, TDS will be deducted on bill (Rs.1,59,000/-) inclusive of service tax u/s 194 C @ 2%.

 

And if go by circular (which only states about the rent & not about the labour service) then TDS will be deducted on Rs.1,50,000/- (only on rent) & not on Rs.1,59,000/- u/s 194 I.

 

 

Please correct me if I'm wrong.

Yes !

Now I agree with you Ketan!

I am also confused of those operators charges, if the work as a whole is done under the direction of contractor, then the TDS should be deducted U/s 194 C

 

 

I want to draw the attention towards the CBDT circular no 4 dated 28.04.2008 vide which it has been clarified that tds on any amount paid u/s 194I, is to be deducted on the amount of rent with out includng the service tax. The text of circular can be reached by following the link below........ https://www.fam-is.com/Incometax_forms/CBDT%20Circular%20on%20194I.pdf Hence, TDS is to be deducted on the amount of Rs. 149512 (165889-16377). Since we have provided the diesel, then tds is not be deducted on that amount also..

Hi All,

 

I think there is difference between Hire Charges and Rent.

 

Rent belongs to series of payment for a underline asset for a continious period and the Hire Charges are payment for works we require time to time but not on routine basis.

 

For Example

Rent - We Hire a cab at Rs. 50000 per month.(Section 194C)

Hire Charges - Paid by us time to time for a Cab Service Provider whose cab are fixed at rate of 1000/day,whenever we require.(Section 194 I)

So first we have to decide this is Rent or Contract work.

If it comes under 194 C then at full amount ie Rs.175377

If it comes under 194 I then at Rs. 150000

 

 

if contract is made, then deduct tds on rs. 159000 us 194 (c).

 

if contract is not made, then deduct tds on rs. 159000 us 194(i)

 

service tax amt. will b excluded.