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TDS Deduction

Queries 1436 views 4 replies
hi all, pls clear my doubt i am raising invoice for Rs 100000+12360 (Proff. charges+service tax) to a client.when the client is paying me they are deducting TDS at 11.33% on whole invoice amount (i.e. 112360) is this correct? Tax is to be deducted only on income but here it is deducted from both income and service tax..? pls clear my doubt
Replies (4)

It is not right but many organisation has deduct TDS on total amount of invoice/bill and some on without service tax.
 

But

there is logic, it is that  the organisation (who made the payment) is not consider with the amount of service tax because they pay total amount and the rule is, you calculate TDS on the amount which you pay.

For the organisation the payment is of total amount so they deduct on it.

There is only remedy in that case that we should not charge service tax when our income is not more than Rs.10,00,000/-

OK

As per sec 194H of Income Tax act, TDS is to be deducted on the sum of amount paid as professional service. But in Sec 194I, TDS is to be deducted on income not on total sum.

Therefore it is right to deduct TDS on service tax under sec 194H.

Professional charges under tds sec 194J in this section collecting TDS for whole of invoice value only. not only Profess. charges includeing Service tax.

Hi Suresh

TDS is to be deducted on the total amount paid to the party. Here u shuold  know that TDS is on total amount ;paid and not on the income part.

chandra sekhar P


CCI Pro

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