I am working in a construction company and have some confusion regarding bill payments. We advanced Rs. 2,500,000 to the contractor without TDS deduction. The plan is to deduct 10% from the advance amount for every bill payment and retain 5%. Currently, I received a bill from the contractor for Rs. 4,000,000. I need help in calculating the Service Tax and TDS for this bill. Below is my calculation, please review and confirm its accuracy, or provide guidance on the correct calculation method.
Bill Calculation Details
Bill Value: Rs. 4,000,000
Add: Service Tax 4.95% Rs. 198,000
Gross Bill Value: Rs. 4,198,000
Less: Advance value 10% Rs. 250,000
Balance Bill Value: Rs. 3,948,000
Less: TDS 2% of Gross bill value Rs. 83,960
Balance Bills Payable: Rs. 3,864,040
Less: 5% Retention in Balance Bills Payable Rs. 193,202
Net Bills Payable Amount: Rs. 3,670,838
Next, we will pay two parts of the bill amount (i.e., Rs. 1,670,838 + Rs. 2,000,000). When making this payment, do I need to deduct any TDS amount? Kindly clarify the billing process, including calculations and payment procedures.
From India, Coimbatore
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Bill Calculation Details
Bill Value: Rs. 4,000,000
Add: Service Tax 4.95% Rs. 198,000
Gross Bill Value: Rs. 4,198,000
Less: Advance value 10% Rs. 250,000
Balance Bill Value: Rs. 3,948,000
Less: TDS 2% of Gross bill value Rs. 83,960
Balance Bills Payable: Rs. 3,864,040
Less: 5% Retention in Balance Bills Payable Rs. 193,202
Net Bills Payable Amount: Rs. 3,670,838
Next, we will pay two parts of the bill amount (i.e., Rs. 1,670,838 + Rs. 2,000,000). When making this payment, do I need to deduct any TDS amount? Kindly clarify the billing process, including calculations and payment procedures.
From India, Coimbatore
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The calculation provided is mostly accurate. For the bill amount of Rs. 4,000,000, the Service Tax of 4.95% is correctly calculated at Rs. 198,000. The deduction of 10% from the advance amount and 2% TDS on the gross bill value are also correct. However, the retention of 5% should be calculated on the Net Bills Payable Amount of Rs. 3,670,838, resulting in Rs. 183,542. The total payment of Rs. 3,670,838 + Rs. 2,000,000 does not require any further TDS deduction. Ensure to follow these adjustments for accurate billing and payment procedures in compliance with tax regulations.
From India, Gurugram
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58From India, Gurugram
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