DEAR FRIENDS, I AM HIGLY CONFUSED REGARDING TAX DEDUCTION AT SOURCE WHEN THERE IS A SERVICE TAX ELEMENT IN THE INVOICE. SOME SAY THAT RENT U/S 194 I IS AN EXCEPTIONAL CASE I.E TAX SHOULD BE DEDUCTED ONLY ON THE RENT AMOUNT AND NOT ON THE AMOUNT INCLUDING SERVICE TAX AND SOME SAY THAT ONLY IN THE CASE OF RENT IS TAX TO BE DEDUCTED ON THE SERVICE TAX COMPONENT AND IN ALL OTHER CASES TAX IS TO DEDUCTED ON THE AMOUNT EXCLUDING SERVICE TAX COMPONENT..CAN YOU RESPECTED MEMBERS, PLEASE CLARIFY? IF POSSIBLE ASLO ATTACH THE RELEVANT CLARIFICATION FROM CBDT.. ILL BE HIGHLY GRATEFUL..
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TDS on Service Tax
Replies (4)
TDS has to be deducted from payments including service tax, except in the case of rent (S.194I)
i agree with Mr. Krishna.
Income Tax department is yet agreed only for TDS on Rent but for other categories where service taxe have been charged you have to deduct the TDS on the bill amount (including Service Tax amount) for more details pleae refer circular for Rent at incometaxindia.gov.in
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