26 November 2011
As per CBDT circular TDS should be deducted on an amount including service tax as the sections 194C & 194J states "any sum paid.
But for section 194I(tds on rent)circular CIRCULAR NO. 4/2008, DATED 28-4-2008 clarifies that As per the provisions of 194-I, tax is deductible at source on income by way rent paid to any resident. Further rent has been defined in 194-I as “rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,- (a) land; or (b) building (including factory building); or (c) land appurtenant to a building (including factory building); or (d) machinery; or (e) plant; or (f) equipment; or (g) furniture; or (h) fittings, whether or not any or all of the above are owned by the payee; 3. Service tax paid by the tenant doesn’t partake the nature of “income” of the landlord. The landlord only acts as a collecting agency for Government for collection of service tax. Therefore it has been decided that tax deduction at source (TDS) under sections 194-I of Income-tax Act would be required to be made on the amount of rent paid/payable without including the service tax.
so for Contracts(U/s 194c and fee for professional and technical servics 194J tds should be on rs.1103.
CAclubindia
