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whether tds to be deducted on payment through IMPREST

pooja (student) (28 Points)

16 December 2009

whether tds to be deducted on payment made to a professional through IMPREST. is there any provision related to this.

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18 Replies

Dilip (Working) (408 Points)
Replied 16 December 2009

see however you make the payment the tds is applicable either you credit or make payment to the party/vendor which ever is earlier. Here Imprest means u r paying through cash, right ?

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CA Anand Oberoi (Chartered Accountant) (296 Points)
Replied 16 December 2009

no....... if nature of imprest is advance payment for any expenses paid by professional on behalf of client, then it is reimbursement of expenses. so NO TDS on such amount.

otherwise, tds to be deducted in all cases.

shreyas (Articled Assistant) (45 Points)
Replied 16 December 2009

Originally posted by :pooja
"	whether tds to be deducted on payment made to a professional through IMPREST. is there any provision related to this.	"

Sec. 194J has the wording "any payment" in it so any payment made to professional is liable to tds only exception is reimbursement of expenses and for that seperate bill of reimbursement should be given by professional

Navneet Gupta (Article) (129 Points)
Replied 16 December 2009

section 194J provides that tds should be dedcuted at the time of payment or credit whichever is earlier. hence, tds is deductible when u r makin paymnt thru imprst, not when the bills are submitted to the company.

Robin Kumar Gupta (profession) (179 Points)
Replied 17 December 2009

Fees for professional or technical services.

Section 194J.

(1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of

(a) fees for professional services, or

(b) fees for technical services,

(d) any sum referred to in clause (va) of section,

shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to 10% of such sum as income-tax on income comprised therein

Hence it doesn't matter whehter the payment is made through imprest or any other mode, TDS has to be deducted.

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Gaurang Desai (CA FINAL & CS Inter Student) (123 Points)
Replied 17 December 2009

hey dude,

if the imprest amount is added by professioanl guy then it is advisable to deduct TDS ,if its given seprate bill for that then no need to deduct TDS

Arun Dhawan (Student) (65 Points)
Replied 19 December 2009

I Agree With Anand Oberoi

Tushar Mahendru (Learner) (125 Points)
Replied 20 December 2009

Hi,

TDS is required to be deducted even if the payment is made out of imprest .The amount of expenses incurred by professional even if are clearly distinguished in the Invoice raised to client the TDS shall be deducted.

Since the expenses are incurred in the course of providing service to the client.

CA Anand Oberoi (Chartered Accountant) (296 Points)
Replied 20 December 2009

everyone is saying the same thing.

@ tushar mahendru.... yes i agree.!!

but if you read my previous reply, i have said that if nature of imprest is advance payment for any expenses paid by professional on behalf of client, then it is reimbursement of expenses. then NO TDS is deducted. otherwise it is applicable in all cases, which include your reply too.

one cant deduct tds on expenses incurred on his behalf by others, if the nature of imprest is known in advance.

Bharat Khurana (Student) (153 Points)
Replied 21 December 2009

tds has to be deducted at the earlier of payment or credit irrespective of payment by any mode

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Vivek Jarial (Student) (272 Points)
Replied 21 December 2009

TDS is deducted u/s 194J at the time of payment or Credit his account which ever is earlier.

nikhil bapat (CA) (212 Points)
Replied 02 January 2010

TDS shall be deducted only on the amount charged for professional services, if there is a bifurcation shown in the invoice. If there is no bifurcation as to the charges for professional services and reimbursement of exp, then TDS has to be deducted on the entire bill amt

The mode of payment does not matter

tom (x) (44 Points)
Replied 02 January 2010

As a CA we often obtain advance payments from clients for paying tax etc. Say, Rs.50000/- - (out of which Rs.40000/- is for tax payment and Rs.10000/- as advance fee. )CA can give a separate receipts for this two amounts on collecting 50000/-. from client. No tds required since prof. fee is 10000/- only.

sikandar (Sr.credit controller) (22 Points)
Replied 31 March 2010

hi,

We are into manpower supply business where we provide people working on our rolls and pay salary to them. For one client we are providing Imprest which we recover when the person resigns and then pay it back to the primary client . So when there is a new joinee we pay them directly and bill the amount seperately to the client withour adding service fee.

I want to know whther the client can deduct TDS while paying the imprest bill as this is just rolling out money by taking from client and giving back to the employee.

Regards,

S. Khan