Shivakumar (MANAGING DIRECTOR) 23 May 2011

TDS On service Contracts with Supply

I am Business man and understand that any contracts will attract income tax Formally known as TDS but the TDS is charged on Full invoice value

For Eg: Any Product is sold under servcie contaract 194 C

Product cost is Rs 100

Local Tax is Rs 014

Sum Amounts Rs 114

But the TDS is Made on Entire Rs 114/- Not On the Cost Of Product since the another Rs 14 is elagible Government Tax amount why We have to Pay TDS on such Tax Amount

Can Any One Help Me in this regards

When it is amounted in Cores the Amount of TDS becomes Huge on the Goverment Tax too

Please help Me

Regards

Shivakumar

Hubli

Reply Follow

2 Replies

Asha Pole (Legal) 31 May 2011

Yes you are absolutely right, the tax would be charged on total amount 114 and this is sad part of our Government taxation.Incase of high amount, you end up paying huge amount of tax. But in the end you also have equivalent credit at your end to claim as set off while making the Income Tax payment.

Finally government has realised the impact of double taxation and hence they have come with something called GST which will impose only 1 tax...However it is still at the approval stage.