Tds on sharing of expenses between group concerns

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I have a group of conerns which incur expenditures benefical to the group as a whole and whenever payments of such expenditures happen the concern which effects the payments correctly deducts tDS and complies with all statutory requirements and then shares the expenditure between the group in an agreed ratio.

My query is : Is it necessasary for the Concern which absorbs its portion of such shared expenses to again deduct TDS on the concern which raises a debit for the purpose of sharing of group expenses ?

For eg. A, B, C and D are group concerns. A incurs common expenses, deducts TDS while booking the expense and complies with all requirements and then shares the expenses with B, C  and D.  Is it obligatory on the part of B, C and D to deduct TDS  on the credit given in their books for A in respect of the expenses so shared  ?

If yes, Will this not amount to the same expenses suffering TDS twice, which is not the intention of the section ?

Is there any circular or notification giving exemption to such transactions ?

 

Pl throw light on the subject.

Sivasailam

 

 

Replies (2)
Common expenses like taking a software license to be installed to all of your branches etc will not be liable for tds when expenses booked against respective branch. Others depend on facts of case.

Mr Kulakarni,

This is not sharing of expenses between branches but it is sharing between two or three different companies or firms.

 


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