20 August 2009
Simple logic is that many tax payers get away with tax or go to abroad and it is very diff to trace them and get them taxed.
Second reason Tax if collected at one point would be better to track.
Third say a MNC company have 10000 employee if company deduct TDS then it is easy for govt to get ampunt from company but if employee will pay tax which are 10000 in number.... may be very difficult.
This query was because one case happen with me. our company have a investor who have funded to our co. initially they were conducted "Due Deligence Audit" of our co. and they paid audit fees to the auditor after deducting appropriate TDS on that, the fee was Rs 20 lac, now our investors want us to "reimburse" them the charges paid by them to auditor, here do we need to deduct TDS from their payment???
from my above question -
A) its not going to be revenue of our investors they are simply transfering expenses to us, and tds is already deducted on that amount.
B) if we need to deduct TDS just because we are booking expenses it doesnt make any logic.
Please try to answer asap, it will be great if you can help me with any supportings.
CAclubindia
