As regards TDS on payment of rent service tax element is excluded as per CBDT circular no. 4/2008 dated 28.04.08 which stipulates that " Service Tax paid by tenant doesn't partake the nature of income of the landlord. The landlord only acts as collecting agency for govt for collection of service tax. Therefore it has been decided that TDS u/s 194I would be required to be deducted on amount of rent without including Service tax" but for others i.e contractor (194C) and professionals 194J TDS incl service tax component is deducted.
Reason is in case of Rent i.e 194I TDS to be deducted on payment made to a resident in form of "income by way of rent" and S.Tax is nt an income of receiver of rent, however in case of 194 C and J wordings are "TDS to be deducted by any person not being individual, HUF who is responsible for paying any sum by way of"............
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