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Tds on benifit

20 September 2022

Our C.A.firm sent his assistant for
tax audit / stat audit in our company.
Assistant take his refreshments , lunch in hotel .

They claim their hotel exp.& we pay the same by cheque in favour of assistant name .

In this case can attract tds u/s 194R
please guide

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6 Replies

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 20 September 2022

This is not a benefit or perquisite..It's just like a reimbursement.

There is no net benefit out of this transaction.

Hence 194R is not applicable in the above case

3 Like

Rajkumar Gutti (490 Points)
Replied 20 September 2022

This exp. debited to out of pocket exp. If this exp.charged by C.A in his bill , then , it should consider as his consideration & attract tds u/s 194 J . But here neither deducted as 194J ,nor deducted 194R. Without deducting any tds it is correct?

Sarthak Kumar Dash (Student) (225 Points)
Replied 20 September 2022

If the out-of-pocket expense has been included as part of the professional fee and tax has been deducted under section 194J on the entire amount then no further tax deduction under section 194R is required.

but if the invoice is not in the name of firm and the firm reimbursed the amount to the assistant, then it will be a benefit and required deduction under 194R provided the value of such benefits exceed Rs. 20,000 in the financial year.

This is my understanding till now regarding 194R. Open to discussion and clarification because there are a lot of ambiguity regarding this section.

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 20 September 2022

@ Rajkumar Gutti,

If the outof pocket exp is billed through the invoice then section 194J is applicable if the total bill value is more than 30k per annum

2 Like

Rajkumar Gutti (490 Points)
Replied 21 September 2022

Suppose out of pocket expenses is billed by C.A. in his bill & bill is enclosed , then total bill amount ( profession fees + out of pocket expenses) is to be considered for tds 194 J or only profession fees is to be considered.