Is tds us/194c applicable incase of re-imbursement of exps

No,  tds not applicable on Re-imbursement of expenses if u recived actual bills.

Yes. TDS shall be deducted on the re-imbursements made to Sub-Contractor.

Rate of TDS :-

1% - If deductee is Individual / HUF

2% - If deductee is Pvt. Ltd. / Partnership Firm

Regards,

Devendra Kulkarni

Mr. Devendra,

Please Correct me why should sub-contractor will bear extra expenses as TDS while he has made the payment on behalf on another company and he is submitting the original / actual bill, suppose Donation for Rs. 5000/- paid on behalf of "ABC Company" should ABC Company deduct TDS at the time of re-imbursement of Rs. 5000/- @ 2% TDS and paid only Rs. 4900/- to sub-contractor ?

Regards

no need to deduct tds if amount paid is not an income to the payee ..

provided there should be seperate bill

please refer ITO Vs. Dr.Willmar Schwabe India (P) Ltd. [2005] 95 TTJ 53 (Del).

and as per CBDT Circular No.715, dated 8.8.1995, TDS applicable if bill was raised for gross amount inclusive of re-imbursement expences,

refer q.30

Hello Pranab,

There are two scenario for deducting tax for out of pocket expenses.

1. If the contractor/professional service provider provides a single bill for the contractual service provided and out of pocket expenses then TDS would be deducted on the whole amount as per 194C or 194J (Depending upon the mature of the service)
2. If the contractor/professional service provider provides seperate bill for the contractual service provided and out of pocket expenses then TDS would not be deducted on the whole amount. TDS shall be deducted only the contractual fee.

If in your case the contractor have raised a seperate bill then there is no need to deduct TDS on that amount.

Thanks & Regards

Ketan Kothari