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Tds on agency charges

Rajiv (Senior Accounts Officer) (1548 Points)

02 November 2018

Good Evening to all experts,

Experts,

We received a bill of Shipping Agency. Single bill raised by party including following

Agency Charges = 3500

AAi charges = 5220

Misc. Expenses = 15000

D/o Charges = 10000

Total Amount = 33720

Expenses showing in single bill as per above. Sir will i deduct tds only on Agency Charges or total bill amount. Some experts told that if single bill raised for including ( Agency Charges and Reimbursement Exp.) than tds will be deducted on total bill & Some experts told that if party raised single bill for BOTH Reimbursement and Agency charges . But agency charges shown seprately in single bill . Than tds will be deducted on Only on Agency Charges not to total bill Kindly Help.

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Rajiv (Senior Accounts Officer) (1548 Points)
Replied 04 November 2018

Originally posted by : Rajiv
	Good Evening to all experts, Experts, We received a bill of Shipping Agency. Single bill raised by party including following Agency Charges = 3500 AAi charges = 5220 Misc. Expenses = 15000 D/o Charges = 10000 Total Amount = 33720 Expenses showing in single bill as per above. Sir will i deduct tds only on Agency Charges or total bill amount. Some experts told that if single bill raised for including ( Agency Charges and Reimbursement Exp.) than tds will be deducted on total bill & Some experts told that if party raised single bill for BOTH Reimbursement and Agency charges . But agency charges shown seprately in single bill . Than tds will be deducted on Only on Agency Charges not to total bill Kindly Help.

ANYONE REPLY PLEASE

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170119 Points)
Replied 04 November 2018

On safer side TDS is deducted over aggregate amount, when billed collectively. Otherwise reimbursement bill should have been separately billed.

2 Like

Rajiv (Senior Accounts Officer) (1548 Points)
Replied 04 November 2018

Originally posted by : Dhirajlal Rambhia
	On safer side TDS is deducted over aggregate amount, when billed collectively. Otherwise reimbursement bill should have been separately billed.

THANKS FOR REPLY SIR. PARTY GIVES ONLY BILL NOT PROVIDED ACTUAL BILL OF REIMBURSEMT EXP MADE BILL.

THAN SIR I WILL DEDUCT TDS ON WHOLE AMOUNT ? IF ONLY SINGLE BILL PROVIDED

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170119 Points)
Replied 04 November 2018

Correct ...

1 Like

Rajiv (Senior Accounts Officer) (1548 Points)
Replied 04 November 2018

Originally posted by : Dhirajlal Rambhia
	Correct ...

BUT SIR WHY OTHER EXPERTS TOLD THAT IF IN SINGLE BILL AGENCY CHARGES AND REIMBURSEMT SEPRATE MENTION THAN TDS WILL BE DEDUCT ONLY AGENCY CHARGES ?????

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170119 Points)
Replied 04 November 2018

As per rule the interpretation is correct, as TDS should not be charged over reimbursement of other expenses, but practically its difficult to convince authorities in such conditions. Even a notification was issued by CBDT in this regard.

1 Like

Rajiv (Senior Accounts Officer) (1548 Points)
Replied 04 November 2018

what is notification no ????

Rajiv (Senior Accounts Officer) (1548 Points)
Replied 04 November 2018

But Sr if will not provided actual expenses bill incurred behalf of us than will we decut tds on reimbursement . If single bill provided for reimbursement and Agency charges ????

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170119 Points)
Replied 04 November 2018

Question 30 : Whether the deduction of tax at source under sections 194C and 194J has to be made out of the gross amount of the bill including reimbursements or excluding reimbursement for actual expenses ?

Answer : Sections 194C and 194J refer to any sum paid. Obviously, reimbursements cannot be deducted out of the bill amount for the purpose of tax deduction at source.

2 Like

Rajiv (Senior Accounts Officer) (1548 Points)
Replied 04 November 2018

Originally posted by : Dhirajlal Rambhia
	Question 30 : Whether the deduction of tax at source under sections 194C and 194J has to be made out of the gross amount of the bill including reimbursements or excluding reimbursement for actual expenses ? Answer : Sections 194C and 194J refer to any sum paid. Obviously, reimbursements cannot be deducted out of the bill amount for the purpose of tax deduction at source.

Sir,

Please guide me will i deduct tds or not please ?

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170119 Points)
Replied 04 November 2018

Yes, TDS to be deducted over total bill amount .......

Rajiv (Senior Accounts Officer) (1548 Points)
Replied 04 November 2018

Originally posted by : Dhirajlal Rambhia
	Yes, TDS to be deducted over total bill amount .......

Sir,

One more doubt If i will deduct tds on whole amount and other will asked me why you deducted tds on total bill than sir what will my reply ????/ please please

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170119 Points)
Replied 04 November 2018

Click on the question answer given above....... you will get circular .... .. https://incometaxindia.gov.in/Communications/Circular/910110000000000283.htm

Nitesh bind (Student CA Final ) (12692 Points)
Replied 06 November 2018

Dear Rajiv,

When the Bill has clearly shown the Separate amount for Agency charges, Reimbursement and Misc exp. etc. THEN YOU NEED TO DEDUCT TDS ONLY ON AGENCY CHARGES and not on any reimbursement or misc charge even if you have received a Single Bill. And it is fully complied with Sec 194C. Don't worry about anything because even if the authorities ask for proof you have the bill with clearly mentioning every part of expenses.

Second thing, if you insist to deduct TDS on whole amount it is very likely that the Other party will make question on this That why are you deducting TDS on whole amount? and that may be a dispute as well.

So in my opinion if you have bill which CLEARLY BIFURCATED every expenses then you need to deduct TDS only on Agency Charges. That's sufficient compliance.

Thanks.