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Tds on professional fees (94j) paid to advocate

ABHINANDAN JAIN (CA Student) (886 Points)

24 April 2013

While doing Cash vouching of our audit client, i found that TDS on Professional fees is deducted on the total amount of bill submitted by advocate.

The bill details includes Conveyance charges also.

so my question: whether TDS deducted on total Billed amount is correct or not as in my opinion it should be deducted on the amount excluding Convayance charges.

Or the client has done the correct deduction...?

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Deepak Gupta (CA Student) (15922 Points)
Replied 24 April 2013

Originally posted by : ABHINANDAN JAIN
	While doing Cash vouching of our audit client, i found that TDS on Professional fees is deducted on the total amount of bill submitted by advocate. The bill details includes Conveyance charges also. so my question: whether TDS deducted on total Billed amount is correct or not as in my opinion it should be deducted on the amount excluding Convayance charges. Or the client has done the correct deduction...? CORRECT

Conveyance charges included in the bill are in the nature of reimbursement of expenses.
.
TDS on reimbursement is required to be made if a single bill is raised for the professional fee inclusive of reimbursement of expenses. In such case cases TDS is to be deducted on the gross amount i.e. on the aggregate amount of professional fee and amount of reimbursement of expenses.

Refer to Q.30 of Circular: No. 715, dated 8-8-1995.
.
However, TDS is not required to be deducted on such reimbursement of expenses where separate bills are raised for professional fee and for reimbursement of actual expenses duly supported by expense bills.

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Rishabh Mishra (Student CA Final ) (44 Points)
Replied 27 April 2013

agreeed, tds should be deducted on the gross amount as single bill was raised including the reimbursement.

it is as good as when we claimed our professionl fees for audit which is inclusive of conveyances of audit team, and here client paid us after deducting tds on whole amount