Tds Applicable on Debit Notes - Urgent

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ravinder singh rawat (Querist)
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29 September 2009 Dear Experts,

We are doing a residential project in Joint venture in 50-50 Ration. ABC and XYZ companies are doing in JV.
ABC Company has all power and rights developing residential project.
ABC Company is deploying all man powers and equipments for same project and issue a debit note to XYZ each month for Employs or staff are engage with same project debit note is inclusive of service tax.

All the staff is in payroll of ABC Company.

Now my question is should XYZ Company deduct a TDS on Debit notes issued by an ABC company while making a payment.
If yes then why or if not then why. Please guide.

Regards
Ravinder

Ram Avtar Singh

Ram Avtar Singh (Expert)
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29 September 2009 you are issuing debit note or Invoice TDs attract on contractual amount.

CA V. Mohanakrishnan

CA V. Mohanakrishnan (Expert)
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29 September 2009 There would not be TDS deduction as the debit note is in the nature of expenses being reimbursed in line with the ratio of sharing in the joint-venture.

The same is not an income defined under the various sections for Tax deductions

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