Tds applicability

This query is : Resolved

M.Chandrasekharan (Querist)
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09 June 2014 Dear Experts,
Good Day.

I have a doubt mentioned below which please clarify at the earliest.

I have received a bill for the services received for Rs.900000/- & S.T @ 12.36% Rs.111240/- Total = Rs.1011240/-. When I make payment, on which amount I should deduct TDS? whether on taxable amount Rs.900000/- or total amount of Rs.1011240/-? Kindly clarify. Thanks in advance

M.Chandrasekharan

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Guest (Expert)

09 June 2014 simple on 900000

as per new notification now tds is not deducted on the service tax part, it will be deducted on the service value......

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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10 June 2014 TDS to be deducted on amount excluding service tax.

The CBDT has issued Circular No. 1/2014 dated 13.01.2014 pointing out that the Rajasthan High Court has taken the view in CIT(TDS) vs. Rajashthan Urban Infrastructure that if as per the terms of the agreement between the payer and the payee, the amount of service-tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service-tax component u/s 194J of the Act. Pursuant thereto, the CBDT has decided in exercise of powers u/s 119 that wherever the terms of the agreement/ contract between the payer and the payee, the service tax component comprised in the amount is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component.

Complete notification may be seen from below link--

http://law.incometaxindia.gov.in/DIT/Circulars.aspx

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M.Chandrasekharan

M.Chandrasekharan (Querist)
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11 June 2014 Dear Sri.Ankit Bohra & Sanjay Gupta,

Greetings for the day.

I thank you verymuch for your valuable replies.

Best Regards

M.Chandrasekharan