TDS on out of pocket expenses

This query is : Resolved

Manish (Querist)
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22 February 2010 Dear all

I have received a bill of professional services rendered by a firm of lawyers on which I have deducted TDS u/s 194J @ 10%.

I have also received another bill from the same vendor towards out of pocket expenses incurred by them on our behalf. Service tax has not been imposed on that amount.

So please clarify whether I have to deduct TDS on that bill or not & why?

CMA.Palani Arumugam

CMA.Palani Arumugam (Expert)
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22 February 2010 TDS is not to be deducted on out of pocket expenses. Because out of pocket expenses are paid on your behalf. So these expenses are not in the nature of professional service or contract. It is an expense on your behalf. Hence tds is not to be deducted on outof pocket expenses.