Applicability of TDS

[Guest]

In case where service provider submits certificate of lower deduction under section 197 of income tax Act where AO have mentioned that it is in respect of Income of Assessee, whether TDS is deductible at lower rate on entire payment (including service tax portion) or only in respect of Income comprised in the payment. (The company on safer side deducts TDS on service tax as a practice)

AI Summary

Debate on TDS Applicability: Should Lower Rate Under Section 197 Include Service Tax Collected for Government? A discussion on the applicability of Tax Deducted at Source (TDS) when a service provider submits a certificate for lower deduction under section 197 of the Income Tax Act. One viewpoint suggests that the lower TDS rate should apply to the entire payment, including service tax, as it is considered part of the payment made. Another perspective argues that service tax is not 'income' and should not be subject to TDS, as it is collected on behalf of the government. The discussion references differing interpretations and circulars regarding TDS on service tax elements.