01 August 2011
Circular No. 715 dated 08.08.1995 and the decision of Delhi bench of ITAT in the case ITO V. Dr. William Schwabe India (P) Ltd., says reimbursement of expenses for which bill is separately raised did not attract the provision of Section 194J.
However, if a consolidated bill is raised then the entire amount of bill is subject to TDS. Though the above position is related to section 194J, same analogy can be adopted for other section related to TDS.
02 August 2011
For Reimbursements, one should raise his/her invoice separately and should not include in his/her consultancy invoice to avoid income tax applicability. Mr Chakarpani is correct in saying that reimbursements do not come under the ambit of income Tax if invoice is raised separately.
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