HEY FRIENDS... WANT TO START A DISCUSSION WHICH I FEEL A LOT OF US MUST BE FACING.... WHEN A CONSULTANT GIVES A COMPANY A BILL INCLUSIVE OF SERVICE TAX, IS THE TDS REQUIRED TO BE CALCULATED ON THE GROSS AMOUNT OR THE AMOUNT EXCLUSIVE OF SERVICE TAX...???
CONSIDER THE FOLLOWING SITUATION ... A CONSULTANT CHARGES Rs.19500 AS HIS FEES,. HE ADDS 12.36% i.e Rs. 2410 AS SERVICE TAX. THE QUESTION IS : WOULD TDS BE DEDUCTIBLE IN THIS CASE AS IT MAY BE CONTENDED THE TOTAL AMOUNT OF SERVICES IN THE BILL DOES NOT EXCEED Rs.20,000. ??? AND IF SO ON WHAT AMOUNT Rs> 19,500 OR ON Rs.21910 :D TRICKY SITUATION :D
AN ASSOCIATED PROBLEM RELATING TO THIS WILL ARISE WHILE FILING eTDS RETURN. WHAT WILL BE THE AMOUNT TO BE FILLED UP IN THE "AMOUNT CREDITED IN THE BOOKS" COLUMN. WILL IT BE Rs19500 OR Rs.21,910.
POINT TO DISCUSS . YOU MAY ALSO GET IN TOUCH WITH ME ON :
REGARDS
SUNDEEP

From India , Calcutta
to sandeep
The amount of TDS is always consider on gross total or bill amount raised by the paryt so as per your question tds shall be deducted on gross bill amount (Including Ser Tax) @ 10.30%
thanks
nikunj


Sandeep,
TDS would be deducted on Gross Bill amount including Service tax because service tax is payable by consultant and therefore it becomes the expense of consultant.As expense he will charge from his customer.he will not pay from his pocket.
Thanks
vijay

From United States , Columbus
I dont know how can a Tax not paid from the person's pocket be his expense . Hence the Tax can be deducted only on the Value of Service rendered. Also, TDS can be made on Income Credited to the Concerned Income , so Since Service Tax is not credited with the Income, it is illogical to deduct Tax on Service Tax
From India , Madras
As per rules TDS is required to be deducted on the amount excluding Servuce Tax. No TDS is to be deducted on Service Tax. In the instant case, since the amount excluding TDS is less than the statutory limit of Rs. 20,000 no TDS is required to be deducted. But if the payments during the year exceed Rs. 50,000, then the TDS is required to be deducted on the whole amount at the prescribed rate.
Deepak Thukral
Chandigarh

From India , Chandigarh
What i had posted in my previous reply was Logic. It is necessary to deduct Tax on the Total sum credited to the concerned Person's account or the sum payable to him. Hence we are supposed to pay Service Tax to the person . Even if we take service tax credit, it is necessary to give service tax to the payee. hence liabe to deduct TDS on service tax too.
From India , Madras
I dont see any exemption given in Income tax act with respect to service tax portion with respect to TDS. Correct me if i am wrong. rgds vishwanath
From India , Bangalore
TDS is deducted on Gross Amount inclusive of Service TAx. Two months earlier CBDT has isssued a clarification regarding the same. It says the same. :) Mukesh

Dear Mukesh,
Thanks.
Can we contribute by quoting or uploading the copy of notification for the benefit of community so that we all have clarity on it.
I request all if any one has copy of notification/circular with respect to service tax clarification for TDS purpose, please upload it.
Thanks once again.
Vishwanath

From India , Bangalore
Find attach the clarification as provided by the Income Tax Department for Deduction of Tax including the service tax. Mukesh Goyal


Attached Files
File Type: pdf 634-cit_tds_clarificationonservicetax_154.pdf (348.9 KB, 297 views)


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