Tds on reimbursment

This query is : Resolved

K R Ramesh (Querist)
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17 May 2012 Dear Expert Members,

I have query on applicability of TDS while considering an relocation bill of one of our new employee coming from outside India.

As per the contract, the employee get an reimbursmenet of relocation expenses incurred to a maximum of Rs. XXXX. The employee submits various bills including the brokerage paid on a new house.

Query,
1) Does Section 194 H apply in this condition?
2) If yes, how the TDS needs to be deducted & shown in the books since the employee has already made the payment.

Many thanks

Best Regards

K.R.Ramesh

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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17 May 2012 TDS is NOT deductible on reimbursement of expenses incurred by a person on behalf of the company.

K R Ramesh

K R Ramesh (Querist)
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17 May 2012 Many thanks,

Can I just ask one more query. As per Law & practice 15 days accommodation are provided to an outstation employee relocated to the place of work. Can the company extend the stay say upto 2 months since the employee could not find the appropriate accommodation? Will the extended stay amount be added as perquisite in the employee hand?

Please advice.

Once again Many thanks

Best Regards

Ramesh

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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17 May 2012 In case the period of stay exceeds 15 days, then the facility will be taxable as a perquisite.

K R Ramesh

K R Ramesh (Querist)
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17 May 2012 Once again many thanks for your quick reply.

Best Regards

Ramesh

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