TDS U/s 194 H

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Ashok Thakur (Querist)
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19 June 2011 Can you Pls forward me any case law reference in the matter of TDS U/s 194H, in which TDS deducted on Basic amount not include service tax amount ? And for that assessing officer raised demand as shortrfall.

My concern is, Law says "any income by way of commission or brokerage paid or credit" is liable to deduct TDS @10%. In that case Service tax charged by the party is not his income, then why the TDs is appliable on that part ?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 June 2011 TDS should be deducted on amount exclusive of service tax in case of Sec 194I (Vide CBDT Cicular No. 4 dated 28-04-2008).
In case of TDS under other section TDS should be deducted on amount inclusive of service tax because in above mentioned circular sec 194I has been specificly mentioned. But really this needs a change and TDS should not at all be deducted on Service Tax portion. But till any clarification in this matter we have to follow above rules.

Ashok Thakur

Ashok Thakur (Querist)
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20 June 2011 I am not satisfy with this answer. Pls refer proper reference.

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