Tds on professional fees.

This query is : Resolved

Ravindra (Querist)
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31 July 2011 Hi Sir, In professional fees bill which includes, Investigation/professional fees + Daily halting allowances + Travelling expenses + Photograph charges + other miscellaneous expenses etc and are shown separately. But while settling/paying the bills the Insurance companies are deducting the TDS on entire amount instead of deducting on professional fees only. Is it correct ? if not correct, kindly furnish the correct rules & procedure and oblige.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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31 July 2011 For reimbursement of expenses bill need to be raised separately- As per Decision in ITO vs Dr. Willmar schwabe India P Ltd (2005) ITAT,Delhi. While raising the separate bill for reimbursement expenses TDS will not attract.

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Ravindra

Ravindra (Querist)
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31 July 2011 Thank u very much, for your reply & clarification.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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31 July 2011 I agree with the expert. If a consolidated bill including professional fee and the expenses is raised the insurance company has correctly deducted the TDS. If two separate bills are raised the TDS shall be deducted only on professional service bill. In professional service bill if Service tax is applicable then the same is to be charged whereas in expenses bill no service tax is to be charged.

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