Tds
This query is : Resolved
27 June 2013
Dear Sir/Mam
Is payment made to clearing and forwarding agent for the reimbursement of charges and his fees liable for tds if he provides different bills one of reimbursement and other of his fees.?if liability arises please mention the section also 194c or 194j??
Is payment made to clearing and forwarding agent for the reimbursement of charges and his fees liable for tds if he provides different bills one of reimbursement and other of his fees.?if liability arises please mention the section also 194c or 194j??
27 June 2013
TDS to be deducted u/s 194C. If separate bill for reimbursement is given then TDS should not be deducted on such bill of reimbursement.
27 June 2013
1)No TDS applicable(if seperate invoice provided) on reimbursement expenses made to C&F agent...as it does not partake any income in he hands of C& F agent and he pays on behalf of us as a pure agent.
2)No tds applicable on re-imbursement charges as said above..
TDS @ 194C is applicable on his fees only
Thanks & regards
Ganesh babu k
2)No tds applicable on re-imbursement charges as said above..
TDS @ 194C is applicable on his fees only
Thanks & regards
Ganesh babu k
28 June 2013
Thanks for your advice.can u provide some reference based on your above suggestions.
28 June 2013
what i read in income tax clarifications any amount paid whether its reimbursemnt or others are liable for tds.so if i come to reimbursement bill which i paid to him why liabilty not arises on that?that is the also amount i paid.
28 June 2013
As per CBDT Circular No.715, dated 8.8.1995 it was clearly given that if re-imbursement of expences are also included in gross amount of bill tds to be deducted where as if seperate bill raised for re-imbursement of expences tds not applicable
In order to address the issue whether tax is required to be deducted at source, in respect of reimbursement of expenses, it will be necessary to keep in mind the following two aspects, viz :
(i) Tax is deductible at source under Chapter XVII-B of the Act, only in respect of payment of income or other sum made by the person responsible for such payment, viz. tax-deductor to other person
being the tax-deductee, and
(ii) Reimbursement of expenses does not partake the nature of income in the hands of the payee of such expenses .
You might have seen that any sum paid should deduct TDS:
Yes ,it may be any sum but we cannot deduct tds on reimbursement expenses as it is not partake income in the hands of person as explained above provided they have to give separate bill for reimbursement of expenses
Hope it will clear..
Thanks & regards
Ganesh babu k
In order to address the issue whether tax is required to be deducted at source, in respect of reimbursement of expenses, it will be necessary to keep in mind the following two aspects, viz :
(i) Tax is deductible at source under Chapter XVII-B of the Act, only in respect of payment of income or other sum made by the person responsible for such payment, viz. tax-deductor to other person
being the tax-deductee, and
(ii) Reimbursement of expenses does not partake the nature of income in the hands of the payee of such expenses .
You might have seen that any sum paid should deduct TDS:
Yes ,it may be any sum but we cannot deduct tds on reimbursement expenses as it is not partake income in the hands of person as explained above provided they have to give separate bill for reimbursement of expenses
Hope it will clear..
Thanks & regards
Ganesh babu k
28 June 2013
Sir i would like to ask one more thing if on the above reimbursement bill of various expense only one expense like courier charges are fixed i.e. paid at fixed rate like we will pay Rs1000 whether he expend Rs500 or Rs1500.then his nature of pure agent will remain the same.and whats the tds consequences then?
28 June 2013
TDS applicable under section 194C on such expences..
expence considered as re-reimbursement only if he is providing original invoices for what he expenced from out of his pocket
expence considered as re-reimbursement only if he is providing original invoices for what he expenced from out of his pocket
28 June 2013
then tds become applicable on Only that expense or then the whole reimbursement bill becomes taxable??
28 June 2013
Tds can be deductible on that expense only...it will be okay..as it is clearly shows that rest of expenses are re-imbursement in nature
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