Hi,
We have a security contract for which we will pay Rs. 10,469/- p.m. (Rs. 9,500 + 10.2% service tax). Now, I am confused to deduct TDS @ 2.091% (u/s 194C). The TDS on which amount to deduct? on Rs. 10,469/-? or Rs. 9,500/-?
My question is should I include Service Tax in the TDS calculation or not?
Please advice.
Best Regards
Narasimha Rao
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TDS - Contractors
Replies (42)
Hello,
TDS has to be deducted on 9,500/-. Service tax should not be included for deducting TDS.
TDS has to be deducted on 9,500/-. Service tax should not be included for deducting TDS.
First of all, TDS rate should be either 2.04% or 2.244% and not 2.091%.
Secondly, it should be deducted on the gross amount of the bill including service tax i.e.Rs.10469/=.
Secondly, it should be deducted on the gross amount of the bill including service tax i.e.Rs.10469/=.
TDS has to be deducted on the full amount of the bill.
Mr. Amit, you are saying "TDS rate should be either 2.04% or 2.244% and not 2.091%."
How it come, TDS for a company should be 2% + Surcharge 2.5% + EC 2%, total comes to 2.091%.
Please expidite.
How it come, TDS for a company should be 2% + Surcharge 2.5% + EC 2%, total comes to 2.091%.
Please expidite.
Mr. Narasimha Rao Surcharge rate for a company is 10% instead of 2.5%. Rate of surcharge 2.5% is for foreign companies. So 2.244% is right.
As per circular 715 ,TDS has to be deducted on gross amt of bill,hence service tax cant be excluded.
I am agree with Amit Agarwal
As per circular 715 ,TDS has to be deducted on gross amt of bill,hence service tax cant be excluded.
The position is not quite clear. In its circular, the CBDT has stated that tax has to be deducted on gross amount. In any case, it would be a safer exercise to deduct tax on gross amount including service-tax.
In section 194C(1) it is clearly stated that TDS is to be deducted on "any sum" paid. Any sum has not been defined in the IT Act.
The payment to party is made of the gross amount including service tax, hence TDS should be deducted on gross amount including service tax
As per section 194c tds is to be deducted on gross amount of bill .hence tds should be deducted on gross amount of bill including service tax. the rate of tds is 2.266 % i.e 2 % + 10 %surcharge of tax +3 % Education cess of tax& surcharge. if contractor is indvidual then tds rate 2.06 .( if gross income less than Rs.10 lacs)
The Deduction should be on the total value of the bill inclusive of Service Tax
Can you Pls send Copy Circular 715
As the provsions says any sum payable , than TDS should be dedcuted including Service tax
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