Nishant (Accounts Assistant) (378 Points)
20 September 2011Dear Sirs,
Kindly let me know if TDS needs to be deducted on the "Conveyance charges re-imbursed or out of pocket expenses re-imbursed , etc. " made to Professionals .
Example : Professional Fees to Mr.A --Rs.2,00,000
Conveyance charges reimbursed to Mr.A --Rs.50,000
Out of Pocket expenses reimbursed to Mr.A--Rs.60,000
In the above example should TDS be deducted 0n a)Rs.2,00,000 or b) 2,50,000 or c) 3,10,000
Please reply
Deepak Gupta
(CA Student)
(15922 Points)
Replied 20 September 2011
| Originally posted by : Ashok | ||
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Dear Sirs, Kindly let me know if TDS needs to be deducted on the "Conveyance charges re-imbursed or out of pocket expenses re-imbursed , etc. " made to Professionals . Example : Professional Fees to Mr.A --Rs.2,00,000 Conveyance charges reimbursed to Mr.A --Rs.50,000 Out of Pocket expenses reimbursed to Mr.A--Rs.60,000 In the above example should TDS be deducted 0n a)Rs.2,00,000 or b) 2,50,000 or c) 3,10,000 Please reply |
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TDS should be on total payment including reimbursement of expenses, as per Circular No. 715 dated 8-8-1995.
However, in ITO v. Dr. Willmar Schwabe (2005) 3 SOT 71 (ITAT), it has been held that reimbursement of expenses for which bill is separately raised did not attract the provisions of section 194J.
Rehbar Siamwala
(Sr. Executive Taxation)
(112 Points)
Replied 20 September 2011
Agreed with Deepak, The Bill should be seperately raised in the name of your company. then TDS will not be deductible on the reimbursement of expense
vikas Agarwal
(Article & Ca Final Student)
(125 Points)
Replied 29 September 2011
Agree With Deepak Gupta
Gourav Choudhary
(CA and CS finalist)
(143 Points)
Replied 30 September 2011
| Originally posted by : Deepak Gupta | ||
|
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TDS should be on total payment including reimbursement of expenses, as per Circular No. 715 dated 8-8-1995. However, in ITO v. Dr. Willmar Schwabe (2005) 3 SOT 71 (ITAT), it has been held that reimbursement of expenses for which bill is separately raised did not attract the provisions of section 194J. |
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Question No.30 in the Circular No. 715 dated August 8, 1995 answers reader's query as under:
"Question No.30: Whether the deduction of tax at source under Sections 194-C and 194-J has to be made out of the gross amount of the bill including reimbursements or excluding reimbursement for actual expenses?
Answer: Sections 194-C and 194-J refer to any sum paid. Obviously, reimbursements cannot be deducted out of the bill amount for the purpose of tax deduction at source.
https://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/cirsec194C.htm
Uttam kumar
(Sr. Accounts Officer)
(66 Points)
Replied 18 March 2014
If the pocket expenses claimed through separate invoice than TDS deduction can aviod, else as above as per curcular 715 08/08/1995, any sum paid to cnsultants through consloidated invoice
shahid
(ca)
(41 Points)
Replied 19 August 2015
What if Professional is charging service tax on Reimbursement Expenses.
CAclubindia
