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TDS on Professional Fees

HASIQ ISMAIL (PURSUING CA FINAL ) (110 Points)

08 December 2010

Dear Friends,

On Payment of Consultant Fees to Consultant with Conveyance ,whether TDS has to be deducted on Whole amount( i.e) Inclusive of Conveyance or only on actual consultants fees? Pls give ur suggestions

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13 Replies

CA. RUPESH JOSHI (Chartered Accountant) (174 Points)
Replied 08 December 2010

If the consultants bill is a composite bill and conveyance charges forms part of it then TDS is required to be deducted on the whole amount.

On the other hand if a separate bill for conveyance / out of pocked expenses is given, then there is no TDS liability attached to it.

1 Like

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17858 Points)
Replied 08 December 2010

As per section 194J Any person who is responsible for paying to a resident any sum by way of fees for professional services, or fees for technical services or roaylty shall deduct tax at source @ 10% if the total amount during the financial year exceed Rs. 20,000/-.

TDS shall be deducted at the time of credit of such sum to the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode withever is earlier.

Reimbursement of Expenses:

The Delhi bench of the Income Tax Appellate Tribunal in ITO V. Dr. Willmar Schwabe India (P.) Ltd. held that reimbursement of expenses for which bill is separetaley raised did not attract the provision of section 194J.

Accordingly, if the separete bill is raised for out of pocket expenses or reimbursement of expenses, it would not subject to TDS.

However, if a consolidated bill is raised then the TDS would be deducted from the gross amount. The amount of reimbursement would not be deducted from the bill amount.

3 Like

Paresh Rathod (CA) (222 Points)
Replied 08 December 2010

Originally posted by : CS Ankur Srivastava
	As per section 194J Any person who is responsible for paying to a resident any sum by way of fees for professional services, or fees for technical services or roaylty shall deduct tax at source @ 10% if the total amount during the financial year exceed Rs. 20,000/-. TDS shall be deducted at the time of credit of such sum to the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode withever is earlier. Reimbursement of Expenses: The Delhi bench of the Income Tax Appellate Tribunal in ITO V. Dr. Willmar Schwabe India (P.) Ltd. held that reimbursement of expenses for which bill is separetaley raised did not attract the provision of section 194J. Accordingly, if the separete bill is raised for out of pocket expenses or reimbursement of expenses, it would not subject to TDS. However, if a consolidated bill is raised then the TDS would be deducted from the gross amount. The amount of reimbursement would not be deducted from the bill amount.

Agree with Ankur

nandha (Finance Executive) (53 Points)
Replied 08 December 2010

Point to be Noted: With Effect from 01st July 2010 the applicable amount for Deducting TDS on Profession has been increased from 20000/- to 30000/-.

Regards

Sridhar.

Mayur Arora (CA Final) (295 Points)
Replied 08 December 2010

Agreed with above repliants.

Manish Dwivedi (Senior Accounts Executive) (56 Points)
Replied 08 December 2010

Agree with CA Rupesh Joshi........

CA Deepesh Ruhela (Keen to Learn) (3271 Points)
Replied 08 December 2010

Agree with Ankur sir

Pankaj Arora (Accounts Manager) (23 Points)
Replied 09 December 2010

agree and good post.

CA Tushar kabra (B.com CA.Final student) (42 Points)
Replied 09 December 2010

Agree with Ankurji

SHAH MINAL BHARATKUMAR (PROPRIETOR) (26 Points)
Replied 10 December 2010

thanks for sharing.

lalan Sharma (Accounts Executive) (76 Points)
Replied 05 May 2012

sir

for the month of march , i have credited professional fees in april -12, and payment is also in april -12 then what will be last date to deposit tds , reply soon plz....................

lalan Sharma (Accounts Executive) (76 Points)
Replied 05 May 2012

sir

for the month of march , i have credited professional fees in april -12, and payment is also in april -12 then what will be last date to deposit tds , reply soon plz....................

DIBYENDU (SERVICE) (266 Points)
Replied 05 May 2012

If you credited & paid provided service by the way of professional & technical fees on April 2012, then TDS deducted on said professional & technical fees deposit to central government account is next 7day of May 2012, without pay Interest.