Hi, I have a query... Let Rent invoice is Rs.1Lakh Per month according to contract. Landlord charges service tax @ 10.3%... So, invoice value is Rs.110,300/- . Can i Dedcut TDS @ 10% on Rs.110,300/- ya only on Rs.1Lakh. plz suggest me.
11 Replies
Sumit Grover
(Chartered Accountant )
(3652 Points)
Replied 14 August 2011
as per Circular issed by CBDT,
TDS (in case of rent) is to be deducetd on amount exclusive of service tax
so, in ur case...
it is to be deducted on Rs. 1Lakh
plz correct me if m wrng
(Guest)
| Originally posted by : CA SUMIT GROVER | ||
 |
as per Circular issed by CBDT, TDS (in case of rent) is to be deducetd on amount exclusive of service tax so, in ur case... it is to be deducted on1Lakh AGREED |
|
CA Saiyum khan
(Practicing CA)
(690 Points)
Replied 15 August 2011
In my opinion if input service tax credit is not taken and entire amount of rent inclusive of service tax is charged to P&L a/c then TDS should be deducted on amount inclusive of service tax.
Prachi Jindal
(CA-Article-Final-Student)
(129 Points)
Replied 15 August 2011
TDS to be deducted on Rs 1 lakh only...!!
CA.Ankit Juneja
(Assisstant manager - Accounts in a UK Based MNC)
(189 Points)
Replied 15 August 2011
Hi All... TDS will be deducted on 1 Lakhs only, which is the amount exclusive of service tax. CBDT Circular is the reason behind this...
But then Question arises why TDS on professional payment U/S 194J is deducted on amount inclusive of service tax
The reason behind this is if you go through both the sections (194 I & J) you will find that
194 I says " Any person, not being an individual or a Hindu undivided family, who is responsible for paying to any person any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of—
(a) fifteen per cent if the payee is an individual or a Hindu undivided family; and
(b) twenty per cent in other cases :
Analysis of the above section: TDS to be deducted on INCOME portion only not the service tax portion
194 - J says " (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of—
(a) fees for professional services, or
(b) fees for technical services, 53[or]
53[(c) royalty, or
(d) any sum referred to in clause (va) of section 28,]
shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to 54[ten] per cent of such sum as income-tax on income comprised therein :
Analysis of the above section: TDS to be deducted on ANY SUM paid to Professional and any sum includes service tax portion.
This view has been upheld by Bombay Chamber of commerce see letter below
TDS on service tax on on professional services :After clarification on non application of tds on service tax on rent under section 194I ,doubts has been raised that the same rule should be applicable on 194J or not .To clarify the issue ,A clarification has been sought by Bombay Chamber & commerce & Industry regarding applicability of circular 4/2008 on section 194-J ,and asked the department that whether TDS is to be deducted on service tax collected on the service tax portion collected along with professional services.And it has been replied by the department that scope of clarification issued for section 194-I(RENT) can not be extended for section 194-J(Prof. services).The reply of the department is embedded hereunder.
|
https://www.simpletaxindia.org/ |
https://www.simpletaxindia.org/
nadakuditi Bhargav
(Articled Assistant)
(28 Points)
Replied 16 August 2011
TDS to be deducted on Rs.1,10,300 i.e inclusive of service tax.
mayank
(auditor)
(41 Points)
Replied 17 August 2011
Hi freinds....
I have a party. Who is raising the rent bill on me. I was deducting TDS on Rent Bill. But now that pary is saying that I am comming below the limit. So, can I stop dedution TDS on that Rent?......
Please, suggest me.
R.S.KARTHIK
(Article Assistant----Final Student)
(59 Points)
Replied 19 August 2011
Dear Mayank, 
To deduct TDS on rent , the payment should be more than 1,80,000 per annum , so make sure the payment is not more
than such amount before stopping deduction. Some more ......
........the rate of TDS on rent to be deducted is 2% on Plant
& machinery and 10% on Land and Building...
...these rates are applicable from october 1 2009.
Dear Mayadar,
As others rightly said ....it is on 1,00,000 
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