Tds on which amount

Dear,

as per your question, 

you were recvd Rs.4 L for rent less diesel exp Rs.1.25L, Balance Rs.2.75L in this case you have charged tds on Rs.2.75L @ 2% (As Contractor rate, u/s 94c) if diesel exp reimbursement by party then you consider only rent Rs.2.75L & TDS will applicable on this amount.

Regards,

Bablu Kumar Jha

TDS will be deducted on gross amount i.e. Rs.400000.

Yes,TDS should be on Gross amount of Rs 4 lacs and not on net amount.

The contractual value of consideration is important,the deductions are only a mechanism of payment.

Assuming whole amount is to be deducted in some form or other would you not deduct tax ?

So the gross amount attracts tax.

kkm