the relevant sections for TDS states that TDS is to be deducted on the sum/amount paid.
expenses such as manpower consultancy/ professional charges / room rent in hotels contain either service tax component / luxury tax.
now should TDS be deducted on the entire bill amount or bill amount less service tax/ luxury tax?
most clients argue that service tax/ luxury tax is already a form of indirect tax. deducting TDS on it would be burdening.
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TDS on bills having service tax or luxury tax
Replies (4)
It should be on the gross amount of the bill only, which includes all the taxes etc
Dear Friend
TDS will be deducted on bill amount. No tax will be deducted for tds purpose.
TDS will be deducted on bill amount. No tax will be deducted for tds purpose.
thank u. but clients dont accept wen we tell them this. they want a circular. is there a circular in this regard?
Dear Friend,
There is no circular in this regard. However, clients can be convinced that the TDS is on the entire expense or the account head booked by them in their books and failing which would now even attract disclosure in the new 3CD format by the CA's. Hence, TDS shud be deducted on the gross bill amount.
There is no circular in this regard. However, clients can be convinced that the TDS is on the entire expense or the account head booked by them in their books and failing which would now even attract disclosure in the new 3CD format by the CA's. Hence, TDS shud be deducted on the gross bill amount.
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