Please Help: TDS Deduction on Reimbursement of Expenses
Posted Date : 25-Dec-2013 , 11:49:11 am | Posted By: Aditya Kabra
Category :
Income Tax | Answers :
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Comments :
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Dear All,
MY Company is Provide Industrial Catering, Housekeeping, & Facility Management Services.
My Co. Contract to other Co. for Industrial Catering & Client agree to Reimburse the Gas Cylinder Cost Actual Borne by the Our Co.
Client Pay Actual Cost for Exmp. Our Co. Pay Gas Cylinder agent/Agency Rs 1000/- & Reimbursement bill Charge to Client of Rs 1000/- Only No Additional charges charged to Client.
On Above Rs 1000/- Client Deducted TDS @ 2%. Whether this transaction cover under Tds Liabilities |
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Answers:
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 Answer by: RAHUL SATIJA |
| Since the other company is into a contract with your company, therefore the company is required to deduct under section 194C of The Income Tax Act, 1961. It is really harsh on your side because you are not earning any profit and still your TDS is getting deducted. I would suggest you to directly raise the Gas Agency bill in the name of the other company so that the said company can make payment directly to the agency. Divergent views are invited. Regards
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| Answer by: RAHUL SATIJA |
| Since the other company is into a contract with your company, therefore the company is required to deduct under section 194C of The Income Tax Act, 1961. It is really harsh on your side because you are not earning any profit and still your TDS is getting deducted. I would suggest you to directly raise the Gas Agency bill in the name of the other company so that the said company can make payment directly to the agency. Divergent views are invited. Regards
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| Answer by: RAHUL SATIJA |
| Since the other company is into a contract with your company, therefore the company is required to deduct under section 194C of The Income Tax Act, 1961. It is really harsh on your side because you are not earning any profit and still your TDS is getting deducted. I would suggest you to directly raise the Gas Agency bill in the name of the other company so that the said company can make payment directly to the agency. Divergent views are invited. Regards
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| Answer by: RAHUL SATIJA |
| Since the other company is into a contract with your company, therefore the company is required to deduct under section 194C of The Income Tax Act, 1961. It is really harsh on your side because you are not earning any profit and still your TDS is getting deducted. I would suggest you to directly raise the Gas Agency bill in the name of the other company so that the said company can make payment directly to the agency. Divergent views are invited. Regards
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| Answer by: Shankygarg |
| No. if a separate bill is raised by you for the reimbursement of expenses, no TDS is deductible on reimbursement.
RELEVANT CASE LAW :-
In this regard, a reference may also be made to the judgement of Delhi Bench of the Tribunal in the case of ITO Vs. Dr.Willmar Schwabe India (P) Ltd. [2005] 95 TTJ 53 (Del)
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