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Tds on reimbursment

CA jignesh daiya (CA ) (446 Points)

01 May 2019

we have taken premises on rent our landlord had made payment for property tax & Maintanance charges

now he is asking for reimbursement of the same

my question is whether we are laible to deduct tds on the same if he raised new invoice for reimbursement of exp

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4 Replies

neha jain (6 Points)
Replied 01 May 2019

It is debatable issue by income tax authorities. CBDT circular 715 explains such senarios. If landlord is giving you rent bill including such charges, TDS needs to be deducted on the whole amount. If it is seperate invoice then you may not need to deduct tax if there is no income element. It means the charges are to be paid on actual basis as they are paid by landlord. If you pay some roundsome figure towards such expenses than TDS will need to be deducted. it is advisable to collect such expense receipts and take them on record.

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Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 01 May 2019

no not required as it's not in nature if rent. had you paid these on your own or just reimbursed to landlord doesn't make any difference. normally Maint chgs are to be borne by the tenant only and prop tax is required to be borne by LL only as he's entitled for deduction from prop tax paid.
one thing is that you can insist him that you pay by cheque so that it will appear in his bank account.
it's not proper practice that he's taking deduction also as well as claiming to be reimbursed from you.