Rajesh Shaw (ASSISTANT MANAGER) (38 Points)
21 January 2013Dear Reader,
One of our client for whom we paid rent to third party on behalf and later we raised Reimbursement Bill without any Tax but at the time of payment they deduct TDS @ 10%. But we didn't made any profit from that reimbursement, this our client also know. Please clarify what we should do and if possible kindly provide circular.
Regards
Rajesh
CA Prashant Gupta
(DGM (F & A))
(14068 Points)
Replied 22 January 2013
if you have paid rent then I think client has deducted TDS on Rent.
but he is wrong. he must not deduct TDS on you. it was you who must deduct TDS on rent if applicable.
Santosh V. Thakur
(Sr. Accountant)
(187 Points)
Replied 23 January 2013
following is the procedure as per my view
1. First of all third party ( ABC), the receiver of Rent should issue Rent bill to your client (XYZ) name who suppose to actually going to pay rent.
2. You should deduct the TDS @ 10% on Rent amount (excluding service tax, if any) & pay balance amount to ABC by you on behalf of XYZ.
3. Raise the bill to client XYZ of actually payment made to ABC as reimbursement of Rent.
4. XYZ client cannot deduct TDS on your Invoice as reimbursement of Rent(not a professional fees) because you already deducted TDS on ABC bill.
5. Then XYZ client must pay TDS to Govt. which you deduct from ABC & issue TDS certificate to third party (ABC).
CAclubindia
