03 May 2008
As per the clarification - now the TDS is to be deducted on only the Rent portion leaving the service tax, but this has given arise to a new querry to us i.e till now , we had a prastice of debiting the rent as well as service tax portion to the RENT ACCOUNT and we deducted TDS on the gross amount, but now as per new clarification, Service Tax portion has to be debited to which account? Because if we debited as we did earlier, the TDS amount shall not be justified. ( simple example - rent 12000/- service tax 1483/-, TDS to be deducted only on 12000/- , so now presentely , the RENT account to be debited by only 12000/-, then the amonut of service tax portion has to be debited to which account ?) Thus we require your expert opinion to resolve the issue.
03 May 2008
As per the Board Clarification earlier, TDS is required to be deducted on Gross amount only which is also inclusive of Service tax. Even in the case of Auditors out of pocket expenses and Service Tax both are to be considered for TDS purpose.
I am not aware it this issue has been clarified by the board as you said subsequently.
CAclubindia
