Tds on professional service

This query is : Resolved

Ravi Jhamb (Querist)
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19 September 2013 Earlier i read article of bombay high court. tds on rent and professional will be deduct actual amount except service tax.

please clarify and effective from :-

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 September 2013 You are referring to the case of Commissioner of Income Tax (TDS), Jaipur Vs. M/s. Rajasthan Urban Infrastructure [2013 (8) TMI 12 – RAJASTHAN HIGH COURT] on the issue of "Whether TDS is to be deducted on the amount of Service Tax charged on professional/ technical fees under Section 194J of the Income Tax Act, 1961?".

But still there is no clarification on this matter by CBDT. If the revenue does not file a appeal in Supreme Court and accepts the Judgement of Hon'ble Rajasthan High Court then only we can take shelter under this Judgement.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 September 2013 So as of now follow this:

As per Circular No.4/2008 dated 28.4.2008, it was clarified that TDS on rental payments would be required to be made only on the basic rental amount without including service tax. In other words, TDS should not be made on the service tax portion of the rent. However, this analogy is not applicable to TDS under other sections.

In short--
For 194I - Deduct TDS on amount excluding service tax.
For other section - Deduct TDS on amount including service tax.

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Ganeshbabu K

Ganeshbabu K (Expert)
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19 September 2013 1)TDS NOT APPLICABLE ON SERVICE TAX ON RENT

REFER BELOW FOR CBDT NOTIFICATIONS AND OTHER DETAILED EXPLANATION

https://www.caclubindia.com/share_files/tds-on-service-tax-on-all-payments-except-rent-56695.asp#.UjqI8ManrDU

2)Even though recent court held tds not applicable on professonal services also,,As of now no official CBDT Announcemnet,,
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So mandatory to deduct tds,,revenue may appeal on this decision..
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So deduct tds on service tax of professional services