194c- payment made for reimbursement of expenses.

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Natasha Agrawal (Querist)
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09 January 2015 A Clearing and forwarding agent has paid certain expenses on our behalf. He claims the reimbursement of expenses along with his services charges. His bill appears as follows- (example)
1. Service charges- Rs. 500
2. Reimbursement of expenses paid on our behalf- Rs. 500

Total- 1,000.

Now my question is, whether we have to dedct TDS on the aggregate amount or only service charges?
Will TDS be applicable for payment made as reimbursement of his expenses?

I am confused because Sec 194C states "any sum paid" shall be liable for TDS but logically, reimbursement does not form a part of the income of Clg & fwd agent so it should not be subject to TDS. Kindly express your opinion on the matter.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 January 2015 only on service charges deduct TDS, for reimbursement TDS not applicable.

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CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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09 January 2015 Since it is seperately shown then tds only service charges and not on reimbursement of exp.

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194c- payment made for reimbursement of expenses.

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