TDS deduction on gross or net amount

[velayutham panchatcharam]

Please clarify TDS to be deducted from gross or net amount i.e before service tax amount or after service tax amount. Please provide any case law.

AI Summary

Debate on TDS Application: Gross vs. Net Amount for Service Tax under Sections 194C, 194J, and 194I. A discussion on a forum addresses whether Tax Deducted at Source (TDS) should be applied to the gross or net amount, specifically concerning service tax. One participant argues that service tax, being collected on behalf of the government, should not be included in the taxable amount as it is not income for the recipient. Another participant suggests that, based on the language of sections 194C and 194J, TDS should be deducted on the gross amount, including service tax, except for rent under section 194I. The conversation highlights differing interpretations and calls for clearer guidance from the Central Board of Direct Taxes (CBDT).