Tds on reimbursement of expenses

This query is : Resolved

KALYANA SUNDARAM.T.V. (Querist)
Follow

15 May 2012 Our company is a MNC and registered as PVT. LTD. COY., under Indian Companies Act. Ours is a subsidiary of a MNC which is also registered as PVT. LTD. COY. under Indian Companies Act.

Some of the employees from our parent company is deputed to our company under an agreement. All their salary and other expenses will be reimbursed from us on monthly basis. (Here expenses means Vehicle Hire Charges, Petrol Expenses, Medical, Food Bill etc.). The relevant TDS is deducted by my parent company and the same is also treated as perks over and above the permisible limit and TDS is also recovered from the employee while paying thier salary from my parent company.

Now my question is as follows:

1. With respect to expenses as stated above which is getting recovered from us on monthly basis did we have to deduct TDS on the same even though the original bill is attached along-with the claim bill.

2. Is it enough if my parent company stated in the bill that the same is considred for the respective employees personal taxation purpose and tds is deducted on monthly basis.

Kindly advice.

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
Follow

15 May 2012 If TDS is being done by the parent company, then there is no need to again deduct TDS on the reimbursement of the same expenses. It is as good as expense sharing. For this there is no need to deduct tax.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now