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September 2008

Clarification issued by CBDT in connection with TDS on service tax u/s.194J of the Act : Letter F.No./275/3/2007-IT(B), dated 30-6-2008.

By Pinky Shah, Sonalee Godbole, Gaurang Gandhi, Chartered Accountants
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Part A : DIRECT TAXES


65 Clarification issued by CBDT in
connection with TDS on service tax u/s.194J of the Act : Letter F.No./275/3/2007-IT(B),
dated 30-6-2008.

The Board had earlier clarified vide Dir.Tax/761, dated
5-5-2008 that TDS would not be applicable on Service tax element of rental
income u/s.194I of the Act. In this Notification it has been clarified that
u/s.194I, what has been covered is rental income, whereas u/s.194J, what is
covered is any sum paid as professional or technical fees. Hence, for the
purpose of S. 194J, TDS needs to be deducted on the total amount including
Service tax element.

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