The Central Board of Direct Taxes has issued Circular No. 01/2014 dated 13.01.2014 clarifying that TDS under Section 194J of the Income tax Act,1961 shall be deducted on the amount paid/payable as per the agreement, without considering the Service tax portion. But it is necessary that the Service tax payable is shown separately on the invoice.
For Example:
| Auditor Fees for the year 2012-13 | 1,00,000.00 |
| Service Tax @ 12% | 12,000.00 |
| Ed.Cess @ 2% | 240.00 |
| Sec.Ed.Cess @ 1% | 120.00 |
| Total | 1,12,360.00 |
TDS shall be deducted only on Rs 1,00,000/- as per above Circular No. 01/2014 dated 13.01.2014 it will not deducted on Service Tax. The condition in this circular is service tax shall be shown separately in the invoice.
