TDS on reimbursement of local conveyance &daily allow

This query is : Resolved

surendranath (Querist)
Follow

30 October 2007 We are engaging experts for conducting Safety Audit and Training in Mumbai and outside Mumbai which is done in the factory premises. They are used for 3 to 4 days in a month and their payments are as under.

1. Honorarium per day basis -payment by
Account payee cheque.
2. Local conveyance from residence to airport and back Rs.700/ per trip by cash.

3. Daily allowance to meet the expenses on
food,snacks,tea etc Rs 300/per day by
cash.

The air ticket and stay arrangements are done by the company.

Since the item no. 2& 3 are actually incurred by the experts for performing their journey from residence to airport and for the expenditures on the way &stay period, kindly clarify whther TDs is applicable on the local conveyance and daily allowance.

surendranath

Sandeep Diwan

Sandeep Diwan (Expert)
Follow

31 October 2007 If expert claim the whole thing in one invioce than TDS is to be deducted , if he placed one invioce for his consultancy fees and another for travel and conveyance than TDS is not deducted on 2nd invioce for travel and conveyance.

surendranath

surendranath (Querist)
Follow

01 November 2007 The experts are raising seperate invoices and for local conveyance and daily allowance and paid in cash before proceeding for assignments. Fees are paid by a/c payee cheque after completion of the job.

The our auditors are insisting on tds for both payments on the basis of circular no.715:215 ITR (st) 18- "TDS has to be made on the gross amount of bill including reimbursements for actual expenses.
kindly clarify.

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