Tds u/s 195j

This query is : Resolved

L.Natarajan (Querist)
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13 December 2012 If I have received an invoice for technical service for Rs.100000 on which Sevice Tax @ 12,3% is charged totaling to Rs.112300.as invoice amount . Now at the payment I have to deduct TDS U/S 194J of 10% on Rs.100000 or 10% Rs.112300.
I would be very thankful to you if you can kindly provide me a correct conclusive answer for this issue.
Thanks.
CA.L.Natarajan

CA Hiren Thakkar

CA Hiren Thakkar (Expert)
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13 December 2012 Dear Natarajan,

CBDT has clarified this issue in Circular no 275/73/2007IT dated 30.06.2008. Accordingly, TDS is required to be deducted on whole amount including Service Tax Portion.

These is only one exception to this rule which is TDS u/s 194I (TDS on Rent). Under 194I, TDS is to be deducted on Rent Portion only.

Hope this will suffice your purpose.

Regards
CA Hiren Thakkar

CA Vijay Kumar Walande

CA Vijay Kumar Walande (Expert)
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14 December 2012 Agreed with Mr. Thakkar.
On a careful study of Sec 194J you will observe that. The words used are " Any Sum paid...." Therefore Tax should be deducted on any sum paid to receiver.

SImilary in section 194I the words used are " Any Income by way of rent..." and service tax is not an Income thus in sec 194 I we do not include service tax for tds.

hope it is clear.

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