Tds

This query is : Resolved

B.S.P.KIRAN

B.S.P.KIRAN (Querist)
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25 November 2011 sir

My Query is whether TDS is deductable on service amount or the amount which includes service tax. I want detailed clarification

ex: if service amount 1000
Service Tax @ 10.3% 103
1103

i.e whether on 1000 or on 1103 please give me a detailed clarification
Regards
Kiran

CA sheekhr

CA sheekhr (Expert)
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25 November 2011 tds will deduct on 1103 as we also deduct tds on service tax except in case of rent...

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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26 November 2011 As per CBDT circular TDS should be deducted on an amount including service tax as the sections 194C & 194J states "any sum paid.

But for section 194I(tds on rent)circular CIRCULAR NO. 4/2008, DATED 28-4-2008 clarifies that As per the provisions of 194-I, tax is deductible at
source on income by way rent paid to any resident. Further rent has been defined in 194-I as
“rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any
other agreement or arrangement for the use of (either separately or together) any,-
(a) land; or
(b) building (including factory building); or
(c) land appurtenant to a building (including factory building); or
(d) machinery; or
(e) plant; or
(f) equipment; or
(g) furniture; or
(h) fittings,
whether or not any or all of the above are owned by the payee;
3. Service tax paid by the tenant doesn’t partake the nature of “income” of the landlord. The landlord
only acts as a collecting agency for Government for collection of service tax. Therefore it has been
decided that tax deduction at source (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.

so for Contracts(U/s 194c and fee for professional and technical servics 194J tds should be on rs.1103.

for 194I (rent)-rs.1000

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