16 August 2010
Hello Expert, Is TDS applicable in in these 3 cases?
1)MD's birthday - so food was ordered from restuartant for (say)Rs.25000 for 100 employees.
2)Amt paid for membership fees of MD in a library.
3) Sr.VP was relocated. His relocation claim has commission paid to estate agent for arranging flat. Shld TDS be deducted from such commission or ignored as it is reimbursement?
16 August 2010
1. Payments to restaurants/cafes - TDS is not required to be made when payment is made for serving food in a restaurant in the normal course of running of the restaurant/cafe—Circular : No. 715, dated 8-8-1995.
2. No TDS deductible in case of membership fees as it is neither professional fees nor fees for any work to be done.
3. Since it is commission payment TDS should be deducted as the expenses are being booked in your books of accounts.
16 August 2010
If company directly pays to lawyer then TDS is deducted under professional fees.
say if an employee incurs lawyer fees on his visit to a client & claims the same from company. Will the co. deduct TDS while releasing payment to the employee?
17 August 2010
In case of reimbursements to employees TDS is not recoverable.However as per the response of Aditya to your question no. 3,I may be wrong.Hence I am keeping this open.
17 August 2010
What Sunkanyaji says is true that in case of reimbursements to employees TDS is not recoverable. So my first answer to that extent my first reply stands corrected as it will be allowance and reimbursement of allowance not liable for taxation and hence not liable for TDS.
But now for the second query, for professional fees TDS has to be deducted and also there is a very rare case in which professional fees will be paid by the employee and be reimbursed subsequently. So in any case TDS is deductible.
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