Basavaraj (B.Com FCA) (193 Points)
02 April 2013Hi,
as per Section 194C of the Income Tax Act, TDS is not deductible if the amount paid/payable is not exceeding Rs. 30,000/- at one time or 75,000 per financial year.
The invoice of the vendor if it includes some of the reimbursable expenses, the 30,000/75,000 limit applies on the whole invoice amount or is it on the amount on which he charges service tax.
Please clarify.
CMA RAVI
(ASSISTANT MANGER - FINANCE)
(478 Points)
Replied 02 April 2013
Bhavesh
(Accounts)
(899 Points)
Replied 02 April 2013
I Required a Clarification whether the limit of Rs. 30,000/- and of Rs. 75,000/- applicable to a deductee individually or as a whole.
Deepak Gupta
(CA Student)
(15922 Points)
Replied 03 April 2013
| Originally posted by : Basavaraj | ||
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Hi, as per Section 194C of the Income Tax Act, TDS is not deductible if the amount paid/payable is not exceeding Rs. 30,000/- at one time or 75,000 per financial year. The invoice of the vendor if it includes some of the reimbursable expenses, the 30,000/75,000 limit applies on the whole invoice amount or is it on the amount on which he charges service tax. Please clarify. |
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Answer to Question No.30, as provided in Circular No.715, dated 8.8.1995, issued by the CBDT, tax is to be deducted at source out of the gross amount of the bill, including the reimbursements.
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In order to overcome the aforesaid view of the CBDT, it is advisable that a separate bill is prepared in respect of reimbursement of expenses incurred by the person raising the bill for such expenses.
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TDS u/s 194C is required to be made on the entire sum which includes service tax for the reason that the word used is 'any sum' and not 'any payment of income'.
AVTAR SINGH
(Expert)
(1873 Points)
Replied 03 April 2013
It is always advisable to prepare a separate bill for reimbursement of expenses. It will help you to avoid service tax and TDS on such payments.
COMPLETE TAX SOLUTIONS
(MD)
(50 Points)
Replied 14 April 2013
Agreed with above, ask for a seperate invoice for reimbursement of expense
Subhash Mishra
(STUDENT & GST PRACTICENER)
(39 Points)
Replied 23 April 2013
I agreed with above, ask for a separate invoice for reimbursement of expense.
If vendor made single bill and in which total amount charged ( i.e reimbursable expenses and other charges ) in this case you have to deduct TDS on the full amount U/s 194C.
However, in practically separate invoice issued for reimbursable expenses due to such expenses does not come in the preview of of Tax.
CAclubindia
