Tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 April 2016 A travel agent running business of car supplying to a regd. firm.
Firm regularly deduct TDS from the payments done to the agent as yearly business is apprrox imately Rs. 2.00 lac in a year. They are debiting all the expenses in the head 'conveyance and travel'.
Meanwhile the travel agent getting an 'Air Ticket' of a partner for business tour.
Travel agent raised the bill for air ticket on the personal name of partner.
Firm pays for the same.
Querie:
1) Can the firm debit the said expenses as a business expense ?
2) Is the firm liable to deduct TDS against the raised bill ? if no. Please explain or is there any notification for not deduction of TDS

Kaushik Joshi

Kaushik Joshi (Expert)
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27 April 2016 Dear Anonymous, the form can pay for the business tour of its partners. after all the partners are working for the firm. yes deduct tax on the same.

CA SUNIL K GARG

CA SUNIL K GARG (Expert)
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29 April 2016 As per Section 37 "Any expenditure (not being expenditure of the nature described in sections 30 to 36] and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession".
The payment is made for business tour, as partner is not having any personal interest hence the firm can claim deduction of air ticket and liable to deduct TDS u/s 194C on amount of bill.

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