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The decision over which web hosting company to go with can be a daunting one. There are several things to consider — price, customer support, speed and reliability, as well as so many other factors that come into play.
Tds On Web Hosting Charges
Income Tax is deducted at source by the service provider from the payments made to you as an individual or a business. This means that if you are receiving a salary, a commission or any other kind of payment, your employer has to deduct 20% TDS (tax deduction at source) and deposit it with the IT department.
Internet Charges TDS Rate:
The government has fixed the TDS rate on internet charges at 4%. For example, if you have paid Rs 10,000 as internet charges then Rs 400 will be deducted from your bill by the service provider and deposited with the government. This is called as TDS on internet charges or TDS on internet bills.
Amazon Web Services TDS:
Amazon Web Services (AWS) is one of the largest cloud computing service providers in the world. It offers different types of services such as storage space, virtual machines and hosting solutions for individuals and businesses alike. The company provides these services under different plans which can be paid monthly or annually depending on your requirements. All payments made through AWS are subjected to tax deduction at source (TDS).
TDS on Web Hosting Charges
TDS is a tax that the government collects for certain services. The government has decided to levy TDS on email hosting services, internet charges, Amazon Web Services and technical services. All these services come under the purview of TDS and you will be required to pay taxes on them.
If you are using any of these services, you need to know how much tax you are supposed to pay and when you should file your returns. This article will help you understand all about TDS on web hosting charges.
What is TDS?
You may already know that there is a lot of paperwork involved when it comes to paying taxes in India. It’s not just about filing income tax returns annually or paying service tax on your purchases. There are also other types of taxes that you need to keep an eye out for if you want to pay less than what is legally due. One such type of tax is called TDS (Tax deducted at source). For example, if you have an account with any bank or broker, they deduct tax from your balance before making any withdrawals from it or making payments towards bills etc. Similarly, if
TDS on web hosting charges
The income tax department has clarified that the TDS on web hosting services is applicable under Section 194J. In its latest circular, the department has said that TDS would be deducted at a rate of 2 percent if the service provider is not registered under Section 194J.
TDS on email hosting services
Income Tax department has clarified that TDS is applicable to services offered by companies such as Google and Yahoo which provide email services to its users. According to the Income Tax Act, any person who provides services or facility of telecommunication in India will have to deduct 2 percent of the value of such service or facility.
Internet charges tds rate
The government has also clarified that internet usage charges are liable for TDS deduction at a rate of 2%. However, there is no clarity as to whether this applies to broadband as well. The IT department says that it depends on whether you have a mobile phone connection with your ISP or not. If you do not have a mobile connection with your ISP then you can claim exemption from paying TDS on internet charges up to Rs 50 per month.
Tds on Email Hosting Services
Email hosting services are offered by many companies. The TDS rate on email hosting services is 18% of the total value charged to the customer. This means that if you are paying Rs 1,000 for your email hosting service, then you will have to pay Rs 180 as TDS. The TDS on email hosting services is calculated as per your billing period. If your bill is based on monthly basis then your TDS will be calculated on monthly basis and if it is based on quarterly basis then the TDS will be calculated quarterly.
If the billing period of your email service provider is monthly or quarterly then you can calculate your tax liability using this calculator: http://www.taxsutra.com/tds-calculator/.
Tds On Internet Charges
Internet charges like broadband internet charges and mobile internet charges are also taxable under Section 194A of Indian Income Tax Act 1961. Broadband internet charges include fixed line charges and mobile broadband charges while mobile internet charges include 3G and 4G data plan charges.
Internet usage charges are subject to 18% TDS rate which means that out of every Rs 100 spent on internet use, Rs 18 will go towards paying taxes for the government
TDS is applicable on the income of Service Provider from providing e-mail hosting services.
TDS is applicable on the internet charges paid to any service provider. The rate of TDS is dependent upon the amount of invoice value. There are two rates for TDS i.e., 3% and 6%. If invoice value is less than or equal to Rs. 10,000 then 3% has to be deducted while if it exceeds Rs 10,000 then 6% has to be deducted.
Amazon Web Services TDS Rate:
Amazon Web Services (AWS) provides cloud computing platforms to its clients. AWS provides services like infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS). In case of IaaS and PaaS there will be no levy of TDS but in case of SaaS there will be levy at the rate of 10%.
(i) email hosting services:
Service Tax is payable on the total value charged by the service provider, which includes the charges for providing the email account, web space and bandwidth.
(ii) internet charges:
Service Tax is payable on the amount charged from the subscriber for using internet services. The value of such services will be calculated on the basis of usage or time spent on internet surfing.
(iii) amazon web services:
Amazon Web Services (AWS) provides a set of cloud-computing services including infrastructure as a service (IaaS), platform as a service (PaaS), human resources, analytics and application development platforms to individuals and businesses through its website. It offers its services through various plans ranging from Free Usage Tier to Dedicated Instances. The plan & pricing details are available at https://aws.amazon.com/ebs-storage/pricing/. Service Tax is payable on the charges paid by you for using AWS services which include both Basic or Standard tier usage charges as well as any additional fees that apply to your account if you exceed those tiers (for example, data transfer). You can find out more about AWS billing on their website at https://aws
1. Internet charges:
The service tax rate applicable on the internet charges is at 6%. This means that if a person pays Rs 100 for using internet, he will have to pay Rs 6 as service tax. If a company uses the internet for business purposes, they can claim input credit of the service tax paid on this expense.
2. Email hosting services:
Email hosting services are considered to be a B2B service and hence, the service tax rate applicable is 12% in this case. This means that every time an email is sent or received by an individual or a business, there will be a charge of Rs 1 charged as service tax. However, if both parties are from India and use an email address registered in India (like @yahoo.co.in), then there will be no charge of service tax because there is no inter-state supply involved here i.e., there is no cross-border transaction happening between two parties located in different states of India.
3. Amazon web services:
Amazon web services or AWS is one of the most widely used cloud computing platform which provides various services like storage space, data processing and so on at low rates compared to other platforms like Google Cloud.
Tax is a compulsory payment imposed by the state on individuals and businesses. It is an authorized deduction from an entity’s income, profits or gains. Taxation can be done through direct or indirect means. Direct tax is a charge that is levied directly on the person who earns the income while indirect tax is charged on goods and services that are purchased by people.
Taxes are levied to raise revenue for government expenditure like public projects, social programs, welfare schemes etc. Taxes are also used as an instrument of economic policy and as a means of redistribution of income in society.
There are two types of taxes: direct taxes and indirect taxes. Direct taxes include income tax, corporate tax and capital gains tax whereas indirect taxes include sales tax, VAT (value added tax) etc.