LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

194J

CA Manikandan Raghunath ( ) (609 Points)

11 September 2009

In case a consultant raises a bill say for Rs.3000 (his professional fees). And he claims reimbursement (out of pocket expenses) which he did not include in the bill.

On what amount TDS should be deducted??

On the bill amt or on the total amount payable to him??

Reply
Follow
Share

14 Replies

Ratan Deep Saxena (Asstt Manager (Accounts & Finance)) (2998 Points)
Replied 11 September 2009

on the amount mentioned in the bill raised by him.

Yogendra Rawat (CHIEF FINANCE MANAGER) (48 Points)
Replied 11 September 2009

TDS is applicalbe only Professional fee and other reimbursement or outof pocket exp. is not comes under TDS.

Subash Srinivasan (chartered accountant) (390 Points)
Replied 11 September 2009

If he raises seperate invoice for reimbursement exp, then TDS need not be deducted on reim. exp. If he includes in the Professional Fee invoice . then on the whole TDS should be deducted

aurangzaib khan (financial consultant) (95 Points)
Replied 11 September 2009

Tds shall be deducted on any amount paid or payable to deductee, it means any bill which includes reimburshment expenses also, therefor tds will deduct on total amount ie including reimburshment expenses also.

(Guest)

TDS should be deducted from the bill value only.

CA CS Amit Borade (Chief Accountant) (2828 Points)
Replied 11 September 2009

If separate bill raised for Fees & expenses then TDS should be deducted on fees only. But Service tax is applicable for both.

Ramya (Internal Audit) (59 Points)
Replied 11 September 2009

it is clarified by CBDT circular that TDS is deductible on total payment

Santosh kumar (J.A.M) (73 Points)
Replied 11 September 2009

What Subash Srinivas Posted is 100% correct

AJAY PRATAP (FINANCIAL CONSULTANT) (72 Points)
Replied 12 September 2009

TDS SHOULD BE DEDUCTED ON BILL AMOUNT OF RS. 3000/- ONLY & TDS WILL BE DEDUCTED ONLY WHEN THE PAYMENT MADE TO PROFESSIONAL IS MORE THAN RS. 20000/- IN A WHOLE YEAR

Gitanjali Kalra (Chartered Accountant) (22 Points)
Replied 12 September 2009

If a seperate bill is issued for reimbursement, no TDS will be deducted. However if the amount of reimbursement is in the same bill, TDS has to be deducted on the Gross Amount i.e including TDS

Rajeev (www.rkmco.com) (985 Points)
Replied 20 September 2009

The words used in Sec 194J are "any sum paid " , so i guess tds is also applicable on reimbursements . Clarification is provided by the board

Batul (Article assistant) (207 Points)
Replied 30 September 2009

tds should be deducted on bill amount but it is to be deducted only if the single payment exceeds Rs 20000/- or the annual overall payment exceeds Rs 50000/-

CA Manikandan Raghunath ( ) (609 Points)
Replied 02 October 2009

Pls refer circular no 715 dtd 08.08.95

It says that reimbursement cannot be deducted out of the bill amount for the purpose of calculating TDS portion.

Pls refer to the link for clarity

https://law.incometaxindia.gov.in/Directtaxlaws/act2005/Sec_194C.htm

Rajeev (www.rkmco.com) (985 Points)
Replied 02 October 2009

mother of all circulars 715

30. Whether the deduction of tax at source under sections 194C and 194J has to be made out of the gross amount of the bill including reimbursements or excluding reimbursement for actual expenses ?

Answer : Sections 194C and 194J refer to any sum paid. Obviously, reimbursements cannot be deducted out of the bill amount for the purpose of tax deduction at source.