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Tds

venkat (Accountant) (222 Points)

23 August 2012

DEAR FRIENDS,

I HAVE A DOUBT REGARDING TDS.

IF I RECEIVE A BILL AMOUNT OF 112000,IN WHICH RS100000 IS CONTRACT AMOUNT AND 12000 IS SERVICE TAX.

ON WHICH AMOUNT I HAVE TO DEDUCT TDS(1% OR 2%),WHETHER ON BILL 112000 OR ON 100000 WHICH IS CONTRACT AMOUNT. SERVICE TAX IS NOT INCOME OF SERVICE PROVIDER.

PLEASE REPLY AS SOON AS POSSIBLE.

THANKS IN ADVANCE

VENKATESH

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18 Replies

Hemchand Kohli (Accountant) (889 Points)
Replied 23 August 2012

TDS should be deducted on Rs. 100,000.00 Only as service tax is not a income, however you may deduct on total amount also.

1 Like

DAYANANDA K N (ACCOUNTS EXCECUTIVE) (575 Points)
Replied 23 August 2012

It should be on total bill amount which in your case is Rs.1.2 lacs.

Regards

Dayananda

1 Like

varun (article assistant) (86 Points)
Replied 23 August 2012

TDS should be deducted for the whole amount(112000) @ 1% or 2 % whichever is applicable.

1 Like

ranjithsingh (Chartered Accountant) (153 Points)
Replied 23 August 2012

i agree with varun..

1 Like

Anand Raghavendra (Manager-Internal Audit) (111 Points)
Replied 23 August 2012

The entire amount is liable for Tax Deduction.Since the value of the service includes the service tax.

1 Like

ACMA Obulirajan R (M.Com, ACMA) (1119 Points)
Replied 23 August 2012

TDS should be deducted on total amount. Only incase of rental we should deduct tds without service tax.

1 Like

Hemant Kumar (Accounts Manager MBA (Fin) CMA*) (6450 Points)
Replied 23 August 2012

Originally posted by : varun
	TDS should be deducted for the whole amount(112000) @ 1% or 2 % whichever is applicable.

Agree...

1 Like

CA Daksh Dawar (Chartered accountant ) (80 Points)
Replied 24 August 2012

In this circular, board has clarified that tax deduction at source (TDS) under sections 194-I of Income Tax Act would be required to be made on the amount of rent paid/payable without including the service tax. [Circular no. 4 dated 28-4-2008]

Therefore in your case, TDS is to be deducted on the whoe of the amount i.e Rs.1,12,000

1 Like

Ketan Majmudar (Asst Manager F & A) (153 Points)
Replied 24 August 2012

TDS should be deducted on the whole bill amount i.e.Rs.112,000/-

1 Like

CA Sanjay Bag (CHARTERED ACCOUNTANT) (3340 Points)
Replied 24 August 2012

Yes, TDS also to to be deducted on service tax portion. That means in case TDS should be on the total amount of bill

CA. ROHIT GUPTA (Service) (133 Points)
Replied 24 August 2012

TDS will be deductible at the total amount inclusive of service tax eith @ 1%/2% depending on the status of payee.

CA. NARAYAN BHANDARI (Manager-Accounts) (57 Points)
Replied 24 August 2012

Hi, As per Income TAx Act and applicable notifications, CBDT has clearly told that only in case of TDS under rent, TDS is to be deducted without considering the service tax amount. Other than that, for all other categories, TDS is to be deducted on whole value inclusive of service tax. Whether service tax is income or not is not a criteria. The rule is a rule. So please follow it to avoid in compliances under the relevant Act. For your information, whatever TDS is deducted, the assessee will be getting TDS credit which is reflected under 26AS and can claim the same while filing the income tax return. So there is no need to worry.