Reimbursement of expenses

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 December 2011 I am working in a company. My company advanced a sum of Rs.50000/- to an employee for a trip in amusment park with all employees. He incurred all expenses in amusment park including the entries cost of Rs.34000/-. Total expenses comes to Rs48000/- approx which is adjusted against advance and Rs.2000/- received back from employee. The amusment park provided a single receipt of Rs.34000/- to the employee. Now my question is whether company is liable to deduct TDS on it? Our company has not deducted TDS on it.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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05 December 2011 The amusement park is not the contractor of the company who carries work for the Company. As such the company is not required to deduct TDS.
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If receipt is there than the cash payment can also be justified as the park does not accepts cheques towards its fee. Further, the day may be a holiday on such trip was arranged. (in ref. to Section 40A(3))
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Abhishek Ranjan Singh

Abhishek Ranjan Singh (Expert)
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05 December 2011 No company will not deduct the TDS

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Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2011 Thankyou Paras Ji....

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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17 March 2012 It is material who has paid the sum or Rs. 34,000/-? It is the employee himself and the company is not in picture at all. So the TDS liability is not of the company. The employees turnover also does not exceeds the limit prescribed and hence the employee is also not required to deduct TDS.
Now, let us examine the matter in depth. Was there any contract? Answer is NO as you have gone to the park at your own and without any intimation and paid the charges which means you have purchased the services individually although the payment was made by one single person on behalf of the group. So no TDS.