Tax u/s 195

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CA Shraddha Bankar (Querist)
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17 December 2010 The company is making rent payment to NRI at which TDS is deducted u/s 195 but the same is deducted on Net Amount (excl Serviced Tax). Whether the TDS should be deducted u/s 194I or u/s 195?
And if it is to be deducted u/s195 then whether on Gross or Net Amt.?

CA. BHAVIK DILIPBHAI MEHTA

CA. BHAVIK DILIPBHAI MEHTA (Expert)
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18 December 2010 TDS on payment of rent to NRI is to be deducted u/s. 195 & at gross amount.

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CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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18 December 2010 TDS under sec. 194I is for payments made to residents and whereas for NRI's Sec. 195 shall be applicable.

TDS under sec. 195 shall be deductible only on the income portion so the TDS shall be only on the rent portion and not on the service tax portion.

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CA Shraddha Bankar

CA Shraddha Bankar (Querist)
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21 December 2010 I AM CONFUSED AS I HAVE RECEIVED TWO DIFFERENT REPLY CAN ANYONE TELL ME WHAT IS RIGHT ANSWER?

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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21 December 2010 SEC. 195 is very clear and there is recent Supreme Court decision which confirms that only income chargeable to tax in India shall be liable to deduction of tax at source.