TDS on service tax
This query is : Resolved
16 May 2011
i want to know that if we are raising a rent bill to a company then that company will deducte tds on which amount.
please send any article regarding that
please send any article regarding that
16 May 2011
TDS is not to be deducted on service tax on RENT
16 May 2011
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.
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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21 May 2011
CIRCULAR NO 4/2008 , Dated: April 28, 2008
Clarification on deduction of tax at source (TDS) on service tax component on rental income u/s. 194-I of the Income Tax Act.
Representations/ letters have been received in the Board seeking clarification as to whether TDS provisions u/s. 194-I of the Income Tax Act will be applicable on the gross rental amount payable (inclusive of service tax) or net rental amount payable (exclusive of service tax).
2. The matter has been examined by the Board. As per the provisions of 194I, tax is deductible at source on income by way rent paid to any resident. Further rent has been defined in 194I 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.
4. These instructions may be brought to the notice of all officers working in your region for strict compliance.
5. These instructions should also be brought to the notice of the officers responsible for conducting internal audit and adherence to these should be checked by the auditing parties.
F.No.275/73/ 2007-IT(B)
(AnsumanPattnaik)
Deputy Secretary (ITB)
Clarification on deduction of tax at source (TDS) on service tax component on rental income u/s. 194-I of the Income Tax Act.
Representations/ letters have been received in the Board seeking clarification as to whether TDS provisions u/s. 194-I of the Income Tax Act will be applicable on the gross rental amount payable (inclusive of service tax) or net rental amount payable (exclusive of service tax).
2. The matter has been examined by the Board. As per the provisions of 194I, tax is deductible at source on income by way rent paid to any resident. Further rent has been defined in 194I 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.
4. These instructions may be brought to the notice of all officers working in your region for strict compliance.
5. These instructions should also be brought to the notice of the officers responsible for conducting internal audit and adherence to these should be checked by the auditing parties.
F.No.275/73/ 2007-IT(B)
(AnsumanPattnaik)
Deputy Secretary (ITB)
10 August 2012
Thanks for everything
and sorry for delay reply
and sorry for delay reply
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