CBDT in it's circular no. 715 dated 8 August 1995 has clarified that TDS in reimbursement/ out of pocket expenses are required to be deducted under the same section under which TDS on main/ principle expense is required to be deducted.
After the introduction of 194R, there were lots of uncertainty/ scepticism among the businesses whether TDS on reimbursement / out of pocket expense are required to deducted under section 194R or any other section (for instance 194C, 194J etc).
To resolve the above uncertainty, CBDT vide it's circular no. 18 of 2022, clarified that where TDS on reimbursement/ out of pocket expenses should be deducted under the same section under which TDS on main/ principle expense is required to be deducted.
For example, if TDS on Work contract is required to be deducted under section 194C then TDS on reimbursement/ out of pocket expense should also be deducted under section 194C and there is no liability to deduct TDS under section 194R.
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