*Dear Shri abdulgani shaikh and other friends in the group,**A circular or clarification will be valid only if there is any doubt in the provisions of the law. If a law passed by parliament does not have any ambiguity then the CBDT or any other authority have no right or jurisdiction to prescribe a rule which is in contravention of the ACT.
When the Act itself says that the tax is to be deducted on the "INCOME", who is CBDT to over rule? Hence this clarification by one official of CBDT is IRRELEVANT. An act of parliament, that is, IT Act passed by both the houses of parliament and approved by The President of India, can not repeat CAN NOT be over ridden by a mere clarification. If such a thing is allowed [I mean the CBDT circular to over ride the Act of Parliament] then (a) There is no need for parliament and (b) CBDT can give any clarification to increase tax collection, for example they can give a circular that the Life insurance is an allowable outflow u/s 80C only if it is in the name of the assessee etc. sivaraman * On Thu, Aug 13, 2009 at 9:51 AM, abdulgani shaikh < [email protected]> wrote: > * > *** > Dear Sivaraman > Please refer following Circular, Mr Bhavesh is correct > > *Clarification on deduction of tax at source (TDS) on service tax > component on rental income under section 194-I of the Income-tax Act* > > *CIRCULAR NO. 4/2008, DATED 28-4-2008* > > > > Representations/letters have been received in the Board seeking > clarification as to whether TDS provisions under section 194-I of the > Income-tax Act will be applicable on the gross rental amount payable > (inclusive of service tax) or net rental amount payable (exclusive of > service tax). > > 2. The matter has been examined by the Board. As per the provisions of > 194-I, tax is deductible at source on *income* by way rent paid to any > resident. Further rent has been defined in 194-I as > > *rent means any payment, by whatever name called, under any lease, > sub-lease, tenancy or any other agreement or arrangement for the use of > (either separately or together) any,- * > > *(a) land; or * > > *(b) building (including factory building); or * > > *(c) land appurtenant to a building (including factory building); or * > > *(d) machinery; or * > > *(e) plant; or * > > *(f) equipment; or * > > *(g) furniture; or * > > *(h) fittings, * > > *whether or not any or all of the above are owned by the payee; * > > 3. 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. > > 4. These instructions may be brought to the notice of all officers working > in your region for strict compliance. > > 5. These instructions should also be brought to the notice of the officers > responsible for conducting internal audit and adherence to these should be > checked by the auditing parties. > > > > *[F.No.275/73/2007-IT(B)]*** > > > On Wed, Aug 12, 2009 at 8:26 PM, Visvanathan Sivaraman < > [email protected]> wrote: > >> 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. Any views or opinions presented in >>>> this email are solely those of the author and may not necessarily >>>> reflect the opinions of DHFL or its affiliates. >>>> Any form of reproduction, dissemination, copying, disclosure, >>>> modification, distribution and / or publication of >>>> this message without the prior written consent of the author of this >>>> e-mail is strictly prohibited. If you have >>>> received this email in error please delete it and notify the sender >>>> immediately. Before opening any mail and >>>> attachments please check them for viruses and defect. >>>> >>>> >>> >>> >>> >>> >>> >>> 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. Any views or opinions presented in >>> this email are solely those of the author and may not necessarily reflect >>> the opinions of DHFL or its affiliates. >>> Any form of reproduction, dissemination, copying, disclosure, >>> modification, distribution and / or publication of >>> this message without the prior written consent of the author of this >>> e-mail is strictly prohibited. If you have >>> received this email in error please delete it and notify the sender >>> immediately. Before opening any mail and >>> attachments please check them for viruses and defect. >>> >>> >>> >> >> >> > > > > --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Skorydov MyTaxAssistant Member Group" group. 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