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differnece between Withholding tax and purchase/sales tax

Former Member
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Can any one please let me know the differnece between Withholding tax and purchase/sales tax

Thanks

Shravan

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Hi Sharavan,

The basic difference between wht and purchase/sales taxes is when we make the purchase/sales at that time we pay the tax. including tax.

in wht at the time of payment we diduct the tax from our side, rest of the payment we pay to the opposit party. excluding tax, at the time of submission of returns we balance the both wht and other taxes.

assign points if useful.

Raghav

Answers (1)

Answers (1)

Former Member
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Hi,

With holding Tax comes under DIRECT TAXES.

Income Tax, Wealth Tax, Gift Tax.

Income Tax :-

Income from Salary

Income from House property

Income from Business or Profession

Income from Capital Gains

Income from Othersources.

Hence Purchase / Sales Tax comes under INDIRECT TAXES

Sales Tax, Excise Duty, Service Tax, Custmos Duty, Export Duty etc.,

Warm Regards,

Sivakumar Sathiyamoorthy

Former Member
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Withholding tax is related to tds paid or collected for services rendered / taken from service providers. These services have been classified under various sections of the act.

Purchase / Sales tax is related to VAT. SAP configuration is entirely different for both tds and vat.

Points!

Prakash