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Q. > Please Help: TDS on foreign payments
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242 views • Question added Feb 20, 2014 • Income Tax • By Ch.satyanarayana , CA , Hyderabad


my client is an reaserch institute formed by central govt.They are inviting experts from various institutes to give lectures or for technical suggestions. they are paying honorarium to the institutions who sponsored the members and reimbursing the travelling expenses. whether theses amounts amounts are subject to TDS. Pl clarify.

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anand

20-Feb-2014 , 08:33:41 am

In my opinion section 195 of income tax will attract here, even though reserch institute is formed by government, and institute has to withhold tax, rates are to be decided in accordance with the provisions of DTAA. In the case of mere reimbursement of expenses, TDS need not be effected as ruled in the case of reimbursement of out of pocket expenses. The most important recent Judgement in Mahindra & Mahindra’s case reported in 10 SOT 896 Mumbai ITAT has also held that reimbursement of expenses not having the character of income chargeable to tax under the provisions of the IT Act cannot be subject to With holding tax.

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