03 July 2014 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

CA Aditya

CA Aditya (Expert)
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05 July 2014 Only for 194 I adn 194J TDS should be deducted without TDS, rest all the cases TDS should be deducted inclusive of the TDS.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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05 July 2014 Dear Aditya please refer to the notification mentioned above. TDS to be deducted on amount excluding service tax for all sections.

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Rupesh Jain

Rupesh Jain (Expert)
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05 July 2014 in circular 1/2014 it exclude only 194I & 194J. for tds not deducted on service tax.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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05 July 2014 Dear Rupesh Ji please refer to the Notification from the Notification mentioned above. In the notification its clearly written that

"In exercise of the powers conferred under section 119 of the Act, the Board has decided that wherever in terms of the agreement /contract between the payer and the payee, the service tax component comprised in the amount payable to a resident 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."

Section 194I and 194J given for reference but the notification applies to all sections.

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Sandeep Dharar

Sandeep Dharar (Expert)
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05 July 2014 Agree with Expert Mr Sanjay Gupta.

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