There's a contract between a Govt agency and a company regarding a works contract. The value exceeds 2,50,000. Both TDS under GST and TDS under IT are applicable.
Does this lead to net TDs deduction of 4%..?
(2% under IT act and 2% under GST)
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TDS under GST and TDS under IT act
Replies (7)
Quick Summary
Yes that is correct....
@ Honourable CA Altamush Zafar,
dear sir , if I have total 10 sales cgst 500 sgst 500
and I have purchase cgst 200 sgst 200 ,now how to pass GST entry in tally??? please help me
with To and By concepts
dear sir , if I have total 10 sales cgst 500 sgst 500
and I have purchase cgst 200 sgst 200 ,now how to pass GST entry in tally??? please help me
with To and By concepts
@ CA Altamush Zafar sir, thank you for your response.
Will it make any difference on GST to be collected
Will it make any difference on GST to be collected
TDS under IT can be adjusted or refunded on filing of ITR annually.
TDS under GST, TDS Return should be submitted, post that the TDS amount gets credited to cash ledger which can be used for payment of GST or no payable in cash then we can apply for refund of same
TDS under GST, TDS Return should be submitted, post that the TDS amount gets credited to cash ledger which can be used for payment of GST or no payable in cash then we can apply for refund of same
@ Sujana Kamble
You will issue an invoice charging full amount of GST. But the government agency will pay you less amount after deduction of both TDS.
While filing return you will pay the full GST charged in your invoice. The GST TDS can be claimed in electronic cash ledger by filing TDS claim return.
Income Tax TDS can be claimed while filing of Income Tax return for the financial year
@ MPR Sanjay Kumar
Raise a separate post for separate query.
These are two completely separate compliance obligations that happen to share the name TDS.
GST TDS (Section 51, CGST Act):
- WHO: Government departments, PSUs, and notified entities (not all businesses)
- WHEN: On payments to suppliers where the contract value exceeds Rs 2.5 lakh
- RATE: 2% of taxable value (1% CGST + 1% SGST, or 2% IGST for inter-state)
- RETURN: GSTR-7, due by 10th of the following month
- CREDIT: Supplier receives credit in Electronic Cash Ledger via GSTR-7A; must accept it manually on the portal
INCOME TAX TDS (Income Tax Act 2025, formerly IT Act 1961):
- WHO: Payers above prescribed thresholds (companies, individuals in audit)
- WHEN: At time of credit or payment, whichever is earlier
- RATE: Varies by nature of payment (professional fees 10%, contractors 1-2%, rent 10%, etc.)
- RETURN: Form 26Q or 24Q quarterly, and GSTR-7 does NOT apply
- CREDIT: Deductee sees credit in Form 26AS and AIS
Key practical difference: GST TDS affects the cash position of the supplier under GST, while Income Tax TDS affects advance tax credit for the recipient. Both are required where applicable.
For TDS return filing under the Income Tax Act, this [TDS return filing guide](https://taxgarden.in/blog/tds-return-filing-fees-by-ca-cost-breakdown-2026) covers the forms, due dates, and CA cost breakdown.
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