TDS on reimbursement of local conveyance &daily allow

This query is : Resolved

surendranath (Querist)
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30 October 2007 We are engaging experts for conducting Safety Audit and Training in Mumbai and outside Mumbai which is done in the factory premises. They are used for 3 to 4 days in a month and their payments are as under.

1. Honorarium per day basis -payment by
Account payee cheque.
2. Local conveyance from residence to airport and back Rs.700/ per trip by cash.

3. Daily allowance to meet the expenses on
food,snacks,tea etc Rs 300/per day by
cash.

The air ticket and stay arrangements are done by the company.

Since the item no. 2& 3 are actually incurred by the experts for performing their journey from residence to airport and for the expenditures on the way &stay period, kindly clarify whther TDs is applicable on the local conveyance and daily allowance.

surendranath

Sandeep Diwan

Sandeep Diwan (Expert)
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31 October 2007 If expert claim the whole thing in one invioce than TDS is to be deducted , if he placed one invioce for his consultancy fees and another for travel and conveyance than TDS is not deducted on 2nd invioce for travel and conveyance.

surendranath

surendranath (Querist)
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01 November 2007 The experts are raising seperate invoices and for local conveyance and daily allowance and paid in cash before proceeding for assignments. Fees are paid by a/c payee cheque after completion of the job.

The our auditors are insisting on tds for both payments on the basis of circular no.715:215 ITR (st) 18- "TDS has to be made on the gross amount of bill including reimbursements for actual expenses.
kindly clarify.

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