Tds on personal expenditure reimbursement.....

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This query is : Resolved

Deepak (Querist)

01 February 2012 Dear sir,

In case of professionals,Foreign or Indian, whether their personal exps. reimbursement will attract TDS, when such reimbursement mentioned in their contracts itself.

Thanks & Regards

CA SUMiT PATWARi

CA SUMiT PATWARi (Expert)

01 February 2012 When the reimbursement amount is fixed (say Rs 10000 pm), then it takes the nature of income and TDS will get attracted.

However when the amount of reimbursement is in line with the expenses incurred (contract says that, reimbursements will be made to the extent of actual expenses incurred) and claimed after supporting proper expense documents/explanations, then they will not attract TDS.

Pure reimbursements are always exempt from TDS.

Message likes : 2 times

Deepak

Deepak (Querist)

01 February 2012 Thanku sir....

One more doubt:

If a Invoice bill includes Installation & Goods Break up, then we should deduct TDS on whole amt. or on just Installation Amt.

CA SUMiT PATWARi

CA SUMiT PATWARi (Expert)

02 February 2012 Ask your vendor to raise two separate invoices to avoid any complications.

Let one be a sales invoice and the other be a service invoice. Then deduct TDS on the installation service invoice only.

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