As we have a provision that if client has raised a seperate bill for reimbursement of expenses either u/s 194C or 194J then T.D.S is deductible only on Service charge and reimbursement of expenses are to be excluded for the purpose of T.D.S deduction. My doubt is whether Reimbursement expenses are to be taken in to consideration while checking applicability of T.D.S or not. i.e if client paid Rs.20000 for service charge and raised a seperate bill for 30000 for spare item under a contract of Repairs of the asset, then is T.D.S provision apply? if so i aware that T.D.S to be provided on 20000 only.Early reply needed,Thank you.
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194c
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The question is confusing. If the separate bill is raised for repair of an asset, it cannot be said to re-imbursement of expenses.
TDS is deductible on payment to Contractors @ 1% for individual/ HUF & @ 2% for other than individuals/ contractors.
However no deduction is required to be made if the full consideration during a particular FY does not exceed 30000/-
Generally if reimbursement of expenses are included in the same bill where service charges included then T.D.S is to be deductible on Gross amount as per answer to Question no.30 by circular no.715 dated 08.08.1995 by Income tax department.Hence it would be advisable to raise a separate bill for Expenses need to be reimbursed by service receiver.In that contention i asked the query,Thank you for ur reply.
you need to deduct tds only on service charge and not on the bill for spare items. limit of 194c to be tested only in regard to service charges paid.
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