Is TDS to be cut on reimbursement of expenses if they form part of the same bill but are shown separately in the same bill ?? For e.g :- A stat audit bill raised by a CA :- Fees for stat audit (incl ST ) 30,000 Reimbursement of out of pocket expenses 2,000 Is TDS to be cut on entire Rs. 32,000 ? or 30,000?
Dear Kushal,
If a consolidated bill is given by a Stat. Auditor for his fees as well as out of pocket expenditure, then the entire amt. is subject to TDS. If a separate bill is givenfor reimbursement of out of pocket expenditure, then reimbursement of expenditure is not subject to tax deduction.
Refer to the Case - ITO v. Dr. Willmar Schwabe India (P) Ltd. [2005] 3 SOT 71
In your example as the consolidated bill was raised just showing separately the amt of exp., hence TDS will be deducted on total bill amt of Rs. 32000/-
I also fully agree with tahseen.. TDS is liable to be deducted on the whole amount [Rs.32000] in this case..
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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