14 May 2013
Sir, we have been receiving reimbursement of electric charges from one of our clients,against debit notes raised. now this year they insist on deduction of TDS on this payment. Is it deductible , please advise,
14 May 2013
Reimbursement of expenses are not INCOME. These are charges paid by one person on behalf of another and then got back through raising debit note.
In case there is no seperate electricity meter installed by electricity company for tenent and it is in the name of landlord, the landlord can pay the bill and as per agreement he can get reimbursment for the same from tenant.
In case, electricity charges are getting reimbursed on the same rate as you are paying to electricity company and the copy of electricity bill is also attached with debit note raised, there should not be any implication of tds on this amount. However, if landlord is charging for electricity at some agreed rate irrespective of amount payable to electricity company, tds provisions of section 194C may be applicable.
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