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Discussion > Income Tax >

TDS ON REPAYMENT/REIMBURSEMENT OF EXPENSES

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Sr. Account


[ Scorecard : 33]
Posted On 29 December 2009 at 14:47 Report Abuse

I want to know about tds liability on reimbursement of expenes that we are doing on behalf of a company. We contractor and making expense on behalf of  company, that company reimburement to us. Please tell me Thanks In advance


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Amir
Learner


[ Scorecard : 3956]
Posted On 29 December 2009 at 14:55

The liability to DEDUCT TDS IS ON THE PERSON MAKING THE PAYMENT IRRESPECTIVE OF THE FACT THAT PAYMENT IS MADE ON BEHALF OF A CLIENT and SUBSEQUENTLY CLIENT WILL REIMBURSE THE EXPENSES...

So my dear, TDS has to be deducted on payments made on behalf of others..





shailendra
C.A. FINAL


[ Scorecard : 189]
Posted On 29 December 2009 at 14:58

 Dear Dev,

TDS will not be deducted on reimbursement of expenses if bill for reimbursement is given seperately. However if there is a composite bill of service charges and reimbursement, then TDS will be deducted on the whole bill amount.




shailendra
C.A. FINAL


[ Scorecard : 189]
Posted On 29 December 2009 at 15:00

  I agree with amir sir, but sir TDS is deducted on the actual expenditure incurred and not on the expenditure that has been reimbursed.

It has been clearly mentioned in the V.K. Singhania sir reckoner




krishna iyer
Sr.Finance Manager


[ Scorecard : 191]
Posted On 29 December 2009 at 15:09

I feel TDS is required even for reimbursements for payments comings u/s 194 C.  S. 194 C mentions about payments to contractors and do not distinguish actual payment/reimbursements




CA. Anshul Bajaj
Taxation Head


[ Scorecard : 168]
Posted On 29 December 2009 at 15:11

No TDS IS not to be deducted in case reimbursements have been given...but the actual amount of reimb. must be equal to actual expenses incurred...

Correct me if i m wrong




BIJAY KUMAR RUNGTA
CA FINAL STUDENT


[ Scorecard : 85]
Posted On 29 December 2009 at 16:14

 YES,tds liability will be arise but if separate bill for reimbursement of expenses is raised then tds liablity will not impose on reimbursement bii.




Amir
Learner


[ Scorecard : 3956]
Posted On 29 December 2009 at 16:14

Dear Shailender, there are 2 things

1) Reimbursements : - eg:- Out of Pocket expenses in an invoice of a chartered accountant - TDS is to be deducted on out of pocket expenses.

2) Expenses on behalf of others (Which will be claimed as reimbursements as above ):- eg:-Clearing & Forwarding agent makes the payment to Transporter on behalf of client - TDS is to be deducted on this amount also..

Can you please clarify on which subject you are talking that it is clearly mentioned in Singhania's Sir Book.??



Total thanks : 1 times



NARENDER PAWAR
CA final Student


[ Scorecard : 337]
Posted On 30 December 2009 at 11:11

in my opinion tds is not applicable on reimbusshment of exp.




shailendra
C.A. FINAL


[ Scorecard : 189]
Posted On 30 December 2009 at 12:13

 Dear Amir sir,

What i think is that there is no distinction between the reimbursement of out of pocket expenses and expenses on behalf of others. Reimbursement is something what you have already incurred and you claim it from the other person. you can't go into the detail of the expenses that is reimbursed.

 

And its written in the singhania's sir book that reimbursement attract TDS if not given against a seperate bill.



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