TDS on Reimbursement

We are importing materials from overseas and pay the octroi on the same. We have appointed Agent for this who pays the octroi amount and charged service amount for his services. He gives us full bill including Octroi amount which we reimbursed him on the next day. My question is whether TDS is applicable on full amount including Octroi or on service charges only.
Replies (12)
yes,If the bill is consolidated then on full value TDS is applicable
Tax has to be deducted on the whole amount of bill, if the bill doesnot contain any segregation between reimbursements and service charges.
If we take two different bills (1 for Octroi amoutn and 2 for Service Charge ) from the Agent then what will be implication of TDS.
If separate bills are received then TDS will be applicable only on service charges. no tds on reimbursements
If two bills are available separating the reimbursement and service charge amounts, then TDS will be applicable only for service charges.
Can you give me any circular or any other reference to substantiate that tax need not be deducted on reimbursements.
Ms. Abinaya, I can give you a circular, which says that TDS has to be deducted on reimbursements. It is Q. no 30, Circular No.715 dated 1995.(If i am not wrong).

The answer is very simple.  The person appointed for the purpose of discharging the liability of octoria is expected to provide the receipt for payment thereof.  Then no TDS will be deducted on that amount.  In theabsence of proof of payment, the full amount will be liable to TDS.

Plz tell mewhether tds wiil b applicable on reimbursement to employyes

Dear,It depends the nature of reiumbersement. if Its Exp. for company or personnel  exp. reiumbersment in medical/Conveyance ETC is taxable,others are not.

Pls do tell me the Circular No.

When party received a Octroi bill as following from his Octroi agent then what is TDS Amount & on Which Rate / Why?

Octroi charges = 53,574/-

Finance charges = 804/- (1.5% of octroi)

Clearing charges = 500/-

Form charges = 10/-

Total = 54,888/-

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