TDS on auditors out of the pocket expenses

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 January 2011 Dear Sir,

our statutory auditor has billed our company for reimbursement of out of the pocket expenses incurred. Is T.D.S to be deducted on such expenditure. he has not provided us any bills for out of the pocket expenses incurred by his auditing staff. he has claimed100/day of work for each of his auditing staff as out of the pocket expenses. would the answer change if the auditor provides Lunch & traveling bills of accounting staff and reimbursement is made on the basis of actual expenditure incurred by his staff.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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19 January 2011 No TDS is required.

Querist : Anonymous

Querist : Anonymous (Querist)

19 January 2011 sir,

Is T.D.S not required even if the out of the pocket expenses claimed is on approximate basis without any proof of actual expenditure incurred.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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19 January 2011 - Since section 194J refers to ‘any sum paid’, reimbursement of actual expenses cannot be deducted out of the bill amount for the purpose of tax deduction at source.

Circular : No. 715, dated 8-8-1995.

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