Reimbursement of Expenses
This query is : Resolved
vijay shah
(Querist)
26 August 2008
Eg.A LTD is paying commission of Rs.50000 and part of the commission Rs.40000
is reimburse from B Ltd. now TDS will be deducted on what amount Rs.10000/- or what?
is reimburse from B Ltd. now TDS will be deducted on what amount Rs.10000/- or what?
CA E.A.Ravikumar
(Expert)
26 August 2008
Section refers to any sum paid and that, therefore, even reimbursement of actual expenses cannot be deducted out of the bill amount for the purpose of deduction of tax at source.
Circular No. 715 dated August 8, 1995, may be refereed to
It may also be noted that the Supreme Court in the context of Section 194C has in Associated Cement Co. Ltd vs CIT (1993 201 ITR 435 SC) held that tax has to be deducted on the gross amount of the bill and not on the value of the bill as reduced by reimbursement of expenses.
Circular No. 715 dated August 8, 1995, may be refereed to
It may also be noted that the Supreme Court in the context of Section 194C has in Associated Cement Co. Ltd vs CIT (1993 201 ITR 435 SC) held that tax has to be deducted on the gross amount of the bill and not on the value of the bill as reduced by reimbursement of expenses.
Shobhit Singhee
(Expert)
26 August 2008
Vijay,
If the commission of rs.50,000 has been charged in the same bill not raising any other bill for reimbursment amount,then the deduction will be made on full 50,000.
If the commission of rs.50,000 has been charged in the same bill not raising any other bill for reimbursment amount,then the deduction will be made on full 50,000.
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