Tds on rent

as per Circular issed by CBDT,

TDS (in case of rent)  is to be deducetd on amount exclusive of service tax

so, in ur case...

it is to be deducted on Rs. 1Lakh

plz correct me if m wrng

Agree with above comment-

CIRCULAR NO. 4/2008, DATED 28-4-2008

The Central Board of Direct Taxes  has clarified that tax deduction atsource (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.

DEDUCT TDS ON ONLY 1 LAKH 

In my opinion if input service tax credit is not taken and entire amount of rent inclusive of service tax is charged to P&L a/c then TDS should be deducted on amount inclusive of service tax.

TDS to  be deducted on Rs 1 lakh only...!!

Hi All... TDS will be deducted on 1 Lakhs only, which is the amount exclusive of service tax. CBDT Circular is the reason behind this...

But then Question arises why TDS on professional payment U/S 194J is deducted on amount inclusive of service tax

The reason behind this is if you go through both the sections (194 I & J) you will find that

194 I says " Any person, not being an individual or a Hindu undivided family, who is responsible for paying to any person any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of—

  (a)   fifteen per cent if the payee is an individual or a Hindu undivided family; and

  (b)   twenty per cent in other cases :

Analysis of the above section: TDS to be deducted on INCOME portion only not the service tax portion

194 - J says " (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of—

             (a)   fees for professional services, or

             (b)   fees for technical services, ⁵³[or]

        ⁵³[(c) royalty, or

             (d) any sum referred to in clause (va) of section 28,]

shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ⁵⁴[ten] per cent of such sum as income-tax on income comprised therein :

Analysis of the above section: TDS to be deducted on ANY SUM paid to Professional and any sum includes service tax portion.

This view has been upheld by Bombay Chamber of commerce see letter below

https://www.simpletaxindia.org/

TDS to be deducted on Rs.1,10,300 i.e inclusive of service tax.

Dear Mayank,

To deduct TDS on rent , the payment should be more than 1,80,000 per annum , so make sure the payment is not more

than such amount before stopping deduction. Some more ..............the rate of TDS on rent to be deducted is 2% on Plant

& machinery and 10% on Land and Building......these rates are applicable from october 1  2009.

Dear Mayadar,

As others rightly said ....it is on 1,00,000

Thanks for useful informations