Hey friends,
I want to start a discussion about a common issue many of us may be facing. When a consultant provides a company with a bill that includes service tax, should the TDS (Tax Deducted at Source) be calculated based on the gross amount or the amount exclusive of service tax?
Consider this scenario: a consultant charges Rs. 19,500 as his fees. He adds 12.36% i.e., Rs. 2,410 as service tax. The question is: would TDS be deductible in this case considering the total amount of services in the bill does not exceed Rs. 20,000? If so, on what amount should the TDS be calculated – Rs. 19,500 or Rs. 21,910? It's a tricky situation.
An associated problem related to this arises when filing eTDS returns. What should be filled in the "amount credited in the books" column – Rs. 19,500 or Rs. 21,910 since that is the basis for preparing Form 16A's?
This is an important point for discussion. Feel free to get in touch with me at chourasiasundeep@gmail.com.
Regards,
Sundeep
From India, Calcutta
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I want to start a discussion about a common issue many of us may be facing. When a consultant provides a company with a bill that includes service tax, should the TDS (Tax Deducted at Source) be calculated based on the gross amount or the amount exclusive of service tax?
Consider this scenario: a consultant charges Rs. 19,500 as his fees. He adds 12.36% i.e., Rs. 2,410 as service tax. The question is: would TDS be deductible in this case considering the total amount of services in the bill does not exceed Rs. 20,000? If so, on what amount should the TDS be calculated – Rs. 19,500 or Rs. 21,910? It's a tricky situation.
An associated problem related to this arises when filing eTDS returns. What should be filled in the "amount credited in the books" column – Rs. 19,500 or Rs. 21,910 since that is the basis for preparing Form 16A's?
This is an important point for discussion. Feel free to get in touch with me at chourasiasundeep@gmail.com.
Regards,
Sundeep
From India, Calcutta
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TDS on service tax - CBDT clarification 13.1.2014.pdf
PT,ESIC,TDS,FBT ,S[1][1].Tax Calculator.xls