TDS

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This query is : Resolved

Shankar Rao (Querist)

27 August 2010 Dear all
A Herohonda dealer has incured 1,00,000 advertising expenditure as per the company's instruction. later the company has reimbursed the advertising expenses of Rs. 1,00,000. whether the dealer is liable to make TDS on Advertising Expenses.or the company liable to make tds on expenses reimbursed to dealer or both are liable to make TDS
i.e whether TDS applicable on expenditure collected and paid.
Kindly let me Know

POOJA SACHDEVA

POOJA SACHDEVA (Expert)

27 August 2010 Dear Sir

Yes you are liable to deduct the TDS on advertisement more than of Rs20000 under section 94C sub contractor @2%

Thanks & Regards

Pooja

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CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)

27 August 2010 THE DEALER HAS INCURRED THE EXPENSES WHICH IS EXCEEDS THRESHOLD LIMIT, HENCE TDS IS TO BE DEDUCTED U/S 194 C.
AT THE TIME OF REIMBURSEMENT OF EXP , NO TDS WILL BE DEDUCTED.

Since Section 194C refers to “any sum paid”, if the bill contains reimbursement of expenses also, the TDS is applicable on the reimbursements also. [Circular No.715 dt.8-8-1995]. However, if there are separate bills for contract payments and reimbursement of expenses, then, TDS is not required to be made on reimbursement of expenditure

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