Tds late filing penalty

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 November 2013 Dear Sir, I have purchased a property which is valued Rs.65,00,000/- and as i am making the payment i m deducting the TDS as well. The builder applying the service tax @3.71% on the property amount and asking not to deduct the tds on the service tax amount which has been added to the value of property, my query is whether i supposed to deduct the tds on the service tax amount which has been applied @3.71% to the value of the property

Thanking you.

Nitin Bhuta

Nitin Bhuta (Expert)
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30 November 2013 please deduct on service tax amount too as there is no proper clarification available on the subject matter.

anyway builder won't loose anything he can claim set off against his tax liability on account of tds.

Querist : Anonymous

Querist : Anonymous (Querist)

30 November 2013 Dear Sir,
But the builder is saying no that you cant deduct the tds on the service tax amount, please reply with the seection if any is available, so that i can do the needful.

Thanking You.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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30 November 2013 Dear Rajendra,

As the law stands today, you need to deduct tax on service tax amount too. Only exception is rent under 194-I.

there is a recent judgment wherein it was stated that if the service tax is not charged at the time of payment and is recovered through a separate invoice, TDS shall not be applicable. Refer: Commissioner of Income Tax (TDS), Jaipur Vs. M/s. Rajasthan Urban Infrastructure [2013 (8) TMI 12 – RAJASTHAN HIGH COURT]

However, I would still suggest that you should deduct TDS.