TDS

This query is : Resolved

YATHARTH SHARMA (Querist)
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21 December 2010 Dear Sir/Madam,

Is the amount of service tax be included in the amount paid or payable for the deduction of income tax at source,,,
for eg.
basic amount :- 1000
Add:- sercive tax @10.3% 103
total amount of bill 1103

should the TDS be deducted on Rs.1000 or Rs.1103/-

pls tell me with references of provisions of law

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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21 December 2010 CBDT has given clarification on the matter by issuing circular stating that u/s 194-I TDS is deductible only on the rental income & not on service tax (circular no. 4 dated 28-04-2008) and u/s 194-J TDS is deductible on gross amount i.e. inclusive of service tax. (Dated 30-06-2008). The reason given by CBDT are that provisions of section 194-I requiers deduction of tax at sources on "any income by way of rent", whereas provisions of section 194-J requires deduction of tax at sources on "any sum payable" by way of professional fee, for technical services, royalty & non compete fee.