Whether TDS to be deducted on Reimbursement Expenses
This query is : Resolved
02 June 2011
1.Whether TDS to be deducted on reimbursement payments.
2.If service tax added to those reimbursements payments whether TDS to be deducted.
I saw one cilent where on Reimbursement payments service tax are added.
Total Reimbursements are Rs 10000 in one case and Rs 50000 in another case. Service tax in 1st case is Rs 1030. service tax in 2nd case is Rs 5150.
Total Reimbusrsement value is Rs 11030 and Rs 55150 in 2nd case.
Whether TDS to be deducted on above payments.
2.If service tax added to those reimbursements payments whether TDS to be deducted.
I saw one cilent where on Reimbursement payments service tax are added.
Total Reimbursements are Rs 10000 in one case and Rs 50000 in another case. Service tax in 1st case is Rs 1030. service tax in 2nd case is Rs 5150.
Total Reimbusrsement value is Rs 11030 and Rs 55150 in 2nd case.
Whether TDS to be deducted on above payments.
02 June 2011
Dear Dileep,
TDS on reimbursement is not required to be made if separate bills are raised one is for professional fee and the other is for reimbursement of expenditure.
If a single bill is raised for the professional fee inclusive of reimbursement of expenditure, in such a case TDS is to be made on gross amount.
The above view is supported by a case law ITO v. Dr. Willmar Schwabe (2005) 3 SOT 71 (ITAT).
Where as per CBDT circular No. 715 dated 8-8-1995, TDS should be on total payment including reimbursement of expenses. But ITAT in the above decision it was held that reimbursement of expenses for which bill is separately raised did not attract the provisions of section 194J, the above circular attracts only in case bill is raised inclusive of reimbursement of expenditure.
And TDS should be deducted on the gross amount.
With Regards,
TDS on reimbursement is not required to be made if separate bills are raised one is for professional fee and the other is for reimbursement of expenditure.
If a single bill is raised for the professional fee inclusive of reimbursement of expenditure, in such a case TDS is to be made on gross amount.
The above view is supported by a case law ITO v. Dr. Willmar Schwabe (2005) 3 SOT 71 (ITAT).
Where as per CBDT circular No. 715 dated 8-8-1995, TDS should be on total payment including reimbursement of expenses. But ITAT in the above decision it was held that reimbursement of expenses for which bill is separately raised did not attract the provisions of section 194J, the above circular attracts only in case bill is raised inclusive of reimbursement of expenditure.
And TDS should be deducted on the gross amount.
With Regards,
Message likes :
5 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- DELIVERY GOLD & SILVER AND OTHER ETF TRADING PROFIT AS BUSINESS INCOME
- GSTR-1A How to update Invoice
- Excess salary payment.
- 3cd- cash system of accounting is allowed?
- Provision for loans that are under Revenue Recovery
- APPLICABILITYOF GST ON STUDENT HOSTEL FEES
- Form 121-contradictory opinions
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- Stamp Paper for partnership firm change new income tax 2025
- TDS on Purchase of Immovable Property by NRI from NRI
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
- Updated return in budget 2026
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
