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17 Jan 2014

No TDS on Service Tax Portion under Section 194J of the Income Tax Act, 1961

Recently, the Central Board of Direct Taxes has come with a welcome step for the professionals and issued Circular No. 01/2014 dated 13.01.2014 clarifying that TDS under Section 194J (chapter XVII-B of the Income Tax Act, 1961) shall be deducted on the amount paid/payable pursuant to the agreement/contract, without considering the Service tax portion.

As a result of the same, if Service tax payable has been shown separately in the invoice, TDS on professionals under Section 194 J shall be deducted only on the amount as agreed in agreement/contract.