Tds applicability

Pursuant to an important judgement of the Hon’ble Rajasthan High Court, in the case of CIT (TDS), Jaipur Vs. M/s. Rajasthan Urban Infrastructure [2013 (8) holding that if as per the terms of the agreement between the payer and the payee, the amount of service tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service tax component u/s 194J of the Income Tax Act, 1961 Dept.has also issued Circular No.1/2014  on service tax component comprised of payments made to residents” that wherever in terms of the agreement/contract between the payer and the payee, the service tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/ payable without including such service tax component.

No TDS is not liable to deduct as TDS not applicable on the serice tax as exempted in notification.....

Agree with above comments

Agree with above comments

agree with expert .

Thank you all...

disgree,

hii shiva how are you.(AMC)

for the purpose of checking limit we consider the amount to be paid or payable to payee(inclusive of ST).... but As per Circular we deduct the TDS on amount excluding of ST.

Agree With Experts,

If service tax shown separetly in bill we will exclude service tax portion for deduction of TDS as per department circular,( department circular intention to exclude service tax amount whicle deducting TDS if shown seprately) so why we need to include service tax portion for checking limit even same is not liable to dedcut under income tax act.

Thanks in advance

hello deepu, circular only deal with deduction of tds on service tax portion, not with applicability of 194J so here we have refer the sec 194J which tell us when will 194J applicable. i.e amount payable or paid exceed 30000/- (inclusive of ST), 194J will apply.