Dear Shri Parikh, Please read the sections under the IT Act. Please let me know under which section of the IT act the TDS is to be deducted on GROSS amount paid? To my reading from 194A to ..... no where the act says that it should be on GROSS amount.
I give the excerpts of some of the sections here under: *the section 194C reads as follows -* *Any person responsible for paying ""**any sum**"" to any resident ...... shall, at the time of credit of ""**such sum**"" to the account of the contractor o...... deduct an amount equal to—* * (*i*) one per cent, in case of advertising,* * (*ii*)* *in any other case two per cent,* *""**of such sum as income-tax on income comprised therein**""* *194H. *Any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, *any income by way of commission* (not being insurance commission referred to in section 194D<http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/section194D.htm>) or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, *deduct income-tax thereon* at the rate of 3<http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/ftn3section194h.htm>[ten] per cent : [*Rent.* 8<http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/ftn8section194h.htm> *194-I. *Any person, not being an individual or a Hindu undivided family, who is responsible for paying to 9<http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/ftn9section194h.htm>[a resident] *any income by way of rent*10<http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/ftn10section194h.htm>, shall, at the time of *credit of such income* to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, 11<http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/ftn11section194h.htm>[deduct income-tax thereon at the rate of 12<http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/ftn12section194h.htm> [(*a*) ten per cent for the use of any machinery or plant or equipment; (*b*) fifteen per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings where the payee is an individual or a Hindu undivided family; and (*c*) twenty per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings where the payee is a person other than an individual or a Hindu undivided family:]] *Section 194J reads as follows -* Any person, .... paying to a resident ""*any sum*"" by way of - (*a*) fees for professional services, or (*b*) fees for technical services, *or* * **(*c*) royalty, or* * (*d*)* *any sum referred to in clause (*va*)* *of section 28,* shall, at the time of credit of ""*such sum*"" to the account of the payee...... deduct an amount equal to *ten* per cent ""*of such sum as income-tax on income comprised therein*"" As per the highlighted portion of the relevant section it is AMPLY clear that TDS is to be deducted *only *on*"INCOME*" only and not service tax etc since the Service tax and reimbursement are not income. So is the case of of Rent u/s 194-I. *The clarification by CBDT is irrelevant and seems to be only to confuse the assessees.* ** As already explained in my earlier mail the TDS provisions are in two parts. Part-1 is *when* TDS is to be deducted and Part-2 is *on which amount *it is to be deducted. best wishes and Regards Sivaraman On Wed, Aug 12, 2009 at 10:54 AM, Bhavesh A Parekh <[email protected]>wrote: > THNK'S FOR UPGRADATION. > I THINK ONLY IN RENT, SERVICE TAX NOT INCLUDED WHILE DEDUCTING TDS BUT IN > OTHER CASE WE HAVE TO DEDUCT TDS ON GROSS AMT. > > THANK'S > > BHAVESH A. PAREKH > TAXATION MANAGER > DHFL. > CORPORATE OFFICE.BANDRA. MUMBAI-51. > Tel. No.26583333 Extn.-302 > HAVE A NICE DAY. > > [email protected] wrote: ----- > > To: [email protected] > From: Visvanathan Sivaraman <[email protected]> > Sent by: [email protected] > Date: 08/12/2009 09:59AM > Subject: Re: TDS CHART > > > Dear Shri Parekhji, > > Thanks for the TDS Chart. > How ever i have one point to make and assert. > The note-1 at bottom says *"Tax should be deducted on Gross Amount." * > > Please read *all and entire *sections pertaining to TDS. Each section *defines > on which amount *the TDS is to be deducted. Every section requires that > the tax is to be deducted *on **Income * */ Income Component *. No-where > it says that the tax is to be deducted on GROSS. How ever the gross figures > is to be considered for "when" [time] the tax is to be deducted. > > Example 1-> Contracted amount is say 18000 + expenses or Service tax is > 2100 = total 20100.00. Now the tax has to be deducted. But on 18000 only. > Please read the section. > > Example 2-> Contracted amount 21000 + reimb / service tax 2000 = total > 23000. > Tds is to be deducted from 21000 only. > > A circular or clarification will be valid only if there is any doubt in the > provisions of law. If a law passed by parliament does not have any ambiguity > then the CBDT or any other authority have no right to prescribe a rule which > is in contravention of the ACT. > > regards > sivaraman > > On Tue, Aug 11, 2009 at 2:45 PM, Bhavesh A Parekh < [email protected] > > wrote: > >> >> BHAVESH A. PAREKH >> TAXATION MANAGER >> DHFL. >> CORPORATE OFFICE.BANDRA. MUMBAI-51. >> Tel. No.26583333 Extn.-302 >> HAVE A NICE DAY. >> >> -----Forwarded by Bhavesh A Parekh/dhfl on 08/11/2009 02:45PM ----- >> >> To: < [email protected] > >> From: "Abhilash Joshi" < [email protected] > >> Sent by: [email protected] >> Date: 08/11/2009 02:23PM >> Subject: Re: ONE OF THE PREVENTIVE MEASURES FOR SWINE FLU >> >> Dear all, >> >> Can anybody send me TDS chart of rate for all categaries ? >> >> >> Regards >> >> Abhilash >> >> >> >> >> >> >> >> >> >> >> >> DISCLAIMER: >> The contents of this e-mail and any attachment(s) are confidential and >> intended for the named recipient(s) only. >> It shall not attach any liability on the originator or DHFL or its >> affiliates. 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