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TDS

Selvakumar Selvaraj (Chartered Accountant) (1386 Points)

10 May 2007

Qn. For payment made to CA for Audit carried on by him, the bill has the service tax component in it. Now as per the provisions TDS is to be deducted on what amount?
                     (a) On Amount excluding service tax
                     (b) On Amount including  service tax
                     (c) Whether TDS to be decuted on Out of pocket expenses claimed in bill?

Mention the relevant circualrs / notifications / sections / case laws, if possible, because it may make the answer confirmation.

"Smile a lot it costs Nothing"
Selvakumar S

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28 Replies

Dilip Surve (CA Practice ) (16 Points)
Replied 10 May 2007

[quote=2132]Qn. For payment made to CA for Audit carried on by him, the bill has the service tax component in it. Now as per the provisions TDS is to be deducted on what amount?
                     (a) On Amount excluding service tax
                     (b) On Amount including  service tax
                     (c) Whether TDS to be decuted on Out of pocket expenses claimed in bill?

Mention the relevant circualrs / notifications / sections / case laws, if possible, because it may make the answer confirmation.

"Smile a lot it costs Nothing"
Selvakumar S[/quote]

Any idea for Income tax slab for the F.y.2007-2008 ???

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Shankar (58 Points)
Replied 10 May 2007

hi,

what ever amount u would have to pay to professional , tds should be deducted on that amount
since service tax is part of that amount which professional collect from u. it is paid by u to any professional . therefore as per mine opinion tds should be deducted on such serivce tax also

shankar
9820319130

Selvakumar Selvaraj (Chartered Accountant) (1386 Points)
Replied 10 May 2007

As per section 194C of the income tax act says that "........tax to be deducted on income comprised" but as per circular number 681 issued in 1994 says that the " the percentage of deduction stated in that section towards amount of credit of payment. hence the person who is paying no need to consider the income comprised in the payment". But in our case TDS to be deducted on payment including serivce tax or excluding service tax, as per the above circular it is clear that tds to be deducted on whole amount but the service tax came in to indian taxation after the date in which the above said circular issued.

Now how to conclude this ?

Selvakumar Selvaraj (Chartered Accountant) (1386 Points)
Replied 10 May 2007

Hi

Have a nice Day

As per 115WB of income tax act, FBT to be payable on insurance policy amount paid by the employer on behalf of the employee if it is not a statutory obligation on part of the employer.We all know what is Key Man Insurance Policy. Whether the payment made by the employer in this regard subject to FBT or not? if yes. Reply with relevant provisions and clarifications.

"Smile a lot its cost nothing"
Selvakumar.S

Sambu Suresh (CA Job) (564 Points)
Replied 10 May 2007

if you see basic defination of the staff welfare as is given in the FBT , it is clearrly stated that if any payments made to meet the statutory obligations fbt need not to be paid. in your case if workmen compensation are being paid in accordance with the act, fbt not to be paid.

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Sambu Suresh (CA Job) (564 Points)
Replied 10 May 2007

keymen insurance policy is a staff welfare. their is no statutory requirement on u to pay key men insurance policy .so u should have to pay fbt on such payment

Sambu Suresh (CA Job) (564 Points)
Replied 10 May 2007

Qn.Whether TDS need to be deducted on processing fee (for amalgamation) paid to Stock Exchange ?

CA Suresh.S

Sunil (82 Points)
Replied 10 May 2007

Dear All,
If TDS has to be deducted on Service tax then as per the rules laid down in the SERvice tax under finance act 1994, wherein SErvice tax can is payable to department on receipt basis and if TDS is deducted on Service tax that means less receipt of Income & service tax and hence to be remitted shrotly... Pls clarify and also note that the Sec. 194 C says TDS to be deducted on the income comprised therein...

Friendly
Keep Smiling
Sunil D
SD..

Chintanshah (CA Practice ) (122 Points)
Replied 10 May 2007

is any one solve my query
there is a payment made of more than rs 50000 during the year to third party. whether TDS to be deducted or not ?
If yes than from when TDS shall be deducted.
no one shall know at the start of the year their payment shall be og up by rs 50000during the year to particular party.
if payment exceed rs 50000 in february than what is the treatmetn of TDS ?
pls help me

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The One (379 Points)
Replied 10 May 2007

The One Says:

Re: Mr. Selva's question

The service tax is on gross amount charged (including TDS) which includes amount charged by service provider for the service, reimbursement (except to pure agents), and amount whether fully/partly in terms of money. TDS is on the income not service tax (opinions vary)

Re: Mr. Chintan Shah's question
Payment in excess of Rs. 50000 for what?

TDS provisions are based on the nature of the business/profession that has led to the income - the limit varies depending on the nature.

Ramkrishna (Accountant) (325 Points)
Replied 10 May 2007

service tax charged on bill is to depsoited in govt. account through provider , then where is the need to clarify whether tds is to deduted on amount omprised of service tax amount. no way it is the income of service provider.

The One (379 Points)
Replied 10 May 2007

The One Says:

Mr. Ramkrishna the need for clarification arises due to Circular No. 715. Let me reiterate its illogical to deduct TDS on service tax amount but read the circular and a different requirement emerges - Also if you are not stating an opinion why post at all and where 11 other responses are already existing the least you could do is agree or disagree with them .... makes for a better discussion isn't .... I am sure you would agree. Hope to hear your interpretation on the aforesaid (you are sure to find many people who deduct TDS on service tax amount ...... though in my opinion its an incorrect practice)

AMIT (Audit Assistant) (102 Points)
Replied 03 July 2007

Hi selva TDS is to be deducted on total amount of bill including servise tax also relevant circular for that is available at site of income tax india circular no 715 of indirect tax year 1995 pls serch the same. Ok bye..