confusion in TDS

TDS 1565 views 2 replies

can any one tell me that .......if we have a bill of 6000/- from  a professional and it includes 1000 for its travelling then on how much amount we should deduct the TDS......................and other question is that..........if the bill is of 6000/- and it includes 3000/- of its travelling then should we deduct the TDS.................

Replies (2)

The Board has through Circular No.715 dated August 8,1995 clarified that since Section 194J refers to "any sum paid", reimbursement of actual expenses cannot be deducted from the bill and that such reimbursement will also have to be taken into account in deducting tax at source.

However, the issue of whether tax deduction will be attracted where such expenses are claimed through a separate statement stands unclarified by the Board

It is felt that if the expenses are claimed through a separate statement there will be no requirement to deduct tax at source, provided the deductor is satisfied that the expenses claimed as reimbursement are only the actual expenses incurred. If there is an element of profit, that is to say that if the reimbursement is not of actual expenses, tax will have to be deducted at source even if the expenses are claimed through a separate statement.

yes if the bill is inclusive of travelling expenses then on total amount tds to be deducted.

but if the travelling bill is separate then no tds on travelling expenses reimbursement.


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