shankar banerjee (self employed) (162 Points)
05 August 2010A professional submits two bills to his client exceeding Rs.30000/- each. One bill for his professional fees & out of pocket expenses, other bill for the reimbursement of professional fees paid by him to other consultants on behalf of his client.
Please advice applicability of TDS u/s 194J on these two seperate bills.
Thanks
Shankar Banerjee
AMIT KUMAR
(PCC)
(38 Points)
Replied 05 August 2010
please clarify the question, you wrote in the question that first bill is of professional fees & out of pocket expenses, what its mean
according to me your question is that
first bill of professional charges of Rs.30000/-
and second bill of reimbursment of Rs.30000/-
if i think right in that case tds is applicable on first bill at the rate of 10%, and not on the second bill because as per the concept of TDS, TDS is deducted on the income of payee and in your case, second bill is a reimbursment of expense which is not a income.
if it is wrong then please tell me
AMIT KUMAR
brijeshbhatt
(accounts manager)
(22 Points)
Replied 05 August 2010
if the first bill is of Professional fees and Reimbursement of expenses then tds will be deducted on the part of Professional fees only. And for the second bill it is the matter of agreement between consultant and the professional that wether the professional will deduct tds from the consultants bill. but the client will have to deduct on the bill raised by the professional. And then after the professional passes in the tds charge on the consultant it is his concern.
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 05 August 2010
agreed with friends.
regards,
manoj
Harpreet
(* * * * * *)
(1670 Points)
Replied 05 August 2010
agreed with Mr. Brijesh & Amit. Good job frnds.
Shiva Kumar
(CA Final)
(208 Points)
Replied 06 August 2010
Deduct TDS on the ENTIRE amount - i.e., Rs.60,000/-.
Friends, some things should be seen practically.
What if tomo, the AO disallows the amount under 40(a)(ia), you need to go on appeal. The Tax effect will be 10000, then you need to go on appeal and sorts. So why complicate the issue.
Deduct on the entire bill and relax, let him take credit. The money isn't lost forever is it??
Shiva
kamal
(service)
(21 Points)
Replied 06 August 2010
In case of the Reimbursment of expnese the bill is annexed by proper supporting and also no Service Tax is levied on the bill like proof of travel, or other expenses, In that case the TDS is not to be deducted and also the expese is to be booked under the out of pocket expenses - Charges and in other case of fees TDs is to be deducted
25 Hours GST Scrutiny of Return and Notice Handling(With Recording)
Survey, Search and Seizure under Income Tax Act 1961
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