Tds on rent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 October 2013 Dear Sir/Mam,
What is reason for TDS on rent on NET VALUE (EXCLUSIVE OF SERVICE TAX)?
And why in all other cases on value inclusive of Service Tax?

Sanket

Sanket (Expert)
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07 October 2013 The CBDT, based upon the
representations received, vide Circular No.
4/2008, dated 28/04/2008, clarified that
TDS on rent is deducted u/s 194I, and as
the TDS has to be deducted out of
income of the recipient and service tax
collection is not the income of the
recipient, no TDS is required to be
deducted on service tax amount. This
circular, brought the much awaited
clarification, which was also obvious,
keeping the intent of legislature, to collect
tax on prospective income of receiver and
check tax evasion in mind; Based upon
this circular the professional and
corporate world stopped deduction of tax
at source on the service tax amount;

Sanket

Sanket (Expert)
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07 October 2013 However, the CBDT, vide Circular No.
275/73/2007-IT (B), dated 30-06-2008,
again clarified that the clarification
regarding TDS on rent u/s 194 I, will not
be applicable to TDS on fees for
professional and technical services; as per
the provisions of section 194I, TDS has to
deducted on ANY INCOME arising out of
rent, whereas, as per section 194J, TDS
has to be deducted on ANY SUM paid as
fees for professional and technical
services;

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