TDS - Contractors - Income Tax

TDS - Contractors

Page no : 2

The Chartered Accountant ( ) (125 Points)
Replied 28 May 2007

Deducting TDS on the gross amount which is inclusive of service tax, Wont it lead to Double Taxation

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Mukesh Trivedi (13 Points)
Replied 29 May 2007

Dear Rao, Your casee is covered by section 194J (Professional and Technical services) and not 194C (Contractual Payments). Therefore the tax has to be deducted at the applicable rate of TDS + SC + EC on the gross amount of bill. CA Mukesh Trivedi Godhra.

ca.Ashish goenka (profession) (92 Points)
Replied 16 June 2007

tds would also deducted on tds

(Guest)

Hi, I was going thru all the questions and the repy regarding the TDS payment deduction.. im still confused as its not clear that whether TDS has to be deducted on gross exclusive of service tax or inclusive. i also need to know how you calculate for e.g if the contractor's payment is 25000/- + service tax i.e @ 12.24% than how much i need to pay after calculating tds note : the contractor is a stationery printing co.

M.Sriram Shenoy (CA Final) (814 Points)
Replied 25 February 2008

Tax has to be deducted on the full value of bill inclusive of service tax.

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(Guest)

This is a case of Composite Contract. The contract separately specifies cost of materials as Rs 1000 and for other works say Rs.200.Service Tax is to be levied on 1200 or on 200. Further I would like to know the nature of 2% levied on all the taxes payable.

CA. Gurdeep Singh Chawla (C A) (7080 Points)
Replied 25 February 2008

it should be deducted on the gross amount of the bill including service tax i.e.Rs.10469/=.

ANIL K SRIVASTAVA (C A) (47 Points)
Replied 25 February 2008

The CBDT has considered the issue and clarified vide letters dated 8.08.2007 & 24.09.2007 that tax has to be deducted on the gross amount without making any distinction between Service Tax and other income.

(Guest)

thank you for your reply.. i now know that TDS has to be deducted on gross amount only and then service tax need to be added ... :-)

O.D.SHARMA (DGM-F & A) (1734 Points)
Replied 26 February 2008

U have to deduct TDS on gross bill & with Right %age.

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Vijay (CA) (254 Points)
Replied 26 February 2008

HI Its simple. TDS is deductible on gross amount. Means TDS is alos liable on Sevice tax.

Vijay (CA) (254 Points)
Replied 26 February 2008

TDS is liable on full amount including Service tax

(Guest)

On the total amount including service tax as per circular of sevice tax department

(Guest)

some companies deducting tds 22% from transporters who provide pick-up & droping facilities to his employies.

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Mrugesh (CA Final Student) (40 Points)
Replied 29 June 2008

When TDS should be deducted? when payment more than 20000 or invoice boked for more than 20000. because in books of TDS in is written as TDS deduct when single payament more than 20000, at the same time TDS not deductable for More than Single Payment or Credit more than 20000. Whiat is proper?