P. Raja (Manager Finance & Accounts) (198 Points)
05 November 2009We are paying Rent on which service tax has been added , whether we need to deduct TDS on Gross amount of rent inclusive of Service Tax or net amount of Rent exclusive of Service tax ?
Thanks & Regards
P. Raja 
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 05 November 2009
I think there is a circular for this in my view this tds is without service tax.please wait for others to give their views on the same
CA Mani
(Credit Analyst)
(2814 Points)
Replied 05 November 2009
it will only be deducted on rent and not service tax
CA Trinath Galla
(student)
(3130 Points)
Replied 05 November 2009
net amount of rent.....................
| Originally posted by :P. Raja | ||
| " | We are paying Rent on which service tax has been added , whether we need to deduct TDS on Gross amount of rent inclusive of Service Tax or net amount of Rent exclusive of Service tax ? Thanks & Regards P. Raja |
" |
Plz..can anyone make it clear by an example....
CA Trinath Galla
(student)
(3130 Points)
Replied 05 November 2009
example...?
Rent paid-1,00,000. (per month)
service tax to be charged @ 10.3% -Rs. 10,300
Tds to be deducted.... @ 10% if payee is individual or 20% for corporate assesse on 1,00,000(rent) and not 1,10,300(rent+service tax)
| Originally posted by :Trinath | ||
| " | example...? Rent paid-1,00,000. service tax to be charged @ 10.3% -Rs. 10,300 Tds to be deducted.... @ 10% if payee is individual or 20% for corporate assesse on 1,00,000(rent) and not 1,10,300(rent+service tax) |
" |
kkkk...but as in your example rent < rs.120000..
So,accordingly should it be considered for TDS...???
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 05 November 2009
Neha Jain
what we discussed is rent above 10 lacs p.a for which service tax is applicable on that whether tds is inclusive of service tax or excluding the same.In such cases the answer is TDS without service tax.If the rent does not cross the threshold limit of Rs 1,20,000 p.a you need not deduct tax
CA Trinath Galla
(student)
(3130 Points)
Replied 05 November 2009
my example is for one month of rent.
ya if rent per anum is less than 1,20,000 it need not be considered for tds
CA Trinath Galla
(student)
(3130 Points)
Replied 05 November 2009
| Originally posted by :neha jain | ||
| " | Originally posted by :Trinath " example...? Rent paid-1,00,000. service tax to be charged @ 10.3% -Rs. 10,300 Tds to be deducted.... @ 10% if payee is individual or 20% for corporate assesse on 1,00,000(rent) and not 1,10,300(rent+service tax) " kkkk...but as in your example rent < rs.120000.. So,accordingly should it be considered for TDS...??? |
" |
hope u r clear now???!!!
| Originally posted by :sivaram | ||
| " | Neha Jain what we discussed is rent above 10 lacs p.a for which service tax is applicable on that whether tds is inclusive of service tax or excluding the same.In such cases the answer is TDS without service tax.If the rent does not cross the threshold limit of Rs 1,20,000 p.a you need not deduct tax |
" |
Thanxs...
CA Sidhi Gaur
(Chartered Accountant)
(247 Points)
Replied 05 November 2009
In case of rent u/s 194-I, tds is to be calculated on rent exclusive of service tax.
Barots
(-)
(226 Points)
Replied 05 November 2009
As per CIRCULAR NO. 4/2008, DATED 28-4-2008 og IT Act, it has been clarified by CBDT that "Service tax paid by the tenant doesnt 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. "
So TDS s to be deucted only on the pure amount of rent excluding service tax.
C.A. M.Com. Suhas A. Nagpure
(CA)
(1175 Points)
Replied 05 November 2009
what in case of Service Tax on Professional Fees?
e.g. Professional Fees is Rs.50,000/- P.M.
& service Tax is Rs.5,150 (Including EC & HEC)
On What amount TDS should be deducted?
CA Trinath Galla
(student)
(3130 Points)
Replied 05 November 2009
whatever it may be dear suhas.
TDS need not be deducted on service tax as it doesn form part of income of the service provider.
so tds is only on 50,000.
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
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