Tds on reimbursement exp.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
14 June 2014
Dear experts one of the client, who is in the shipping business, has to incur lot of expenditure on behalf of its clients, while preparing the bill, assesee submit the two bills one for reimbursement of exp. incurred and another for service charges, but the parties are deducting the TDS on both the bills, is it correct?, for example if the reimbursement amount is 2 lacs, and the service charges is 20 thousand, If the TDS is deducted on 2,20,000/- it is not fair and correct.
Pl inform me is there any circular or notification from the CBDT to show the same to the companies who are deducting the TDS on both the bills
Pl inform me is there any circular or notification from the CBDT to show the same to the companies who are deducting the TDS on both the bills
Nikhil Kaushik
(Expert)
14 June 2014
as such CBDT issued a circular way back in 1995 ( Circular No.715, dated 8.8.1995), which stated that TDS is to be deducted on all the sums paid.
however, in various judgments it was held that this circular will apply only where reimbursement amount is included in the bill for services offered.
Judgements like
ITO Vs Dr.Willmar Schwabe India (P) Ltd. [2005] 95 TTJ 53 (Del) and 342 ITR (Journ.) 41 have ruled in favor of assessee for not deducting tds on reimbursements.
however, in various judgments it was held that this circular will apply only where reimbursement amount is included in the bill for services offered.
Judgements like
ITO Vs Dr.Willmar Schwabe India (P) Ltd. [2005] 95 TTJ 53 (Del) and 342 ITR (Journ.) 41 have ruled in favor of assessee for not deducting tds on reimbursements.
15 June 2014
so all the reimburements which are billed sep are out of tax net.
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