Urgent Issue related with TDS

[Ganesh Khemka]

Dear Member,

A company has taken an office premises on rent and as per agreement the company has to reimburse towards electricity charges (sub-meter concept) on the actual units of electricity consumption at a pre-defined rate. The rate can be change if there is change in rate of govt. The landlord is issuing separate invoice for electricity apart from rent & maintenance invoice mentioning the actual units consumed at the pre-determined rate and charging service tax on it because the said nature has been excluded from the negative list.

 Kindly suggest whether the TDS has to deducted on the electricity charges or not. 

With Regards

Ganesh  

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[agrawa...@sify.com]

In my view no tds would be applicable in electricity charges and maintenance charges reimbursed by the company. As tds is only applicable on rent paid if exceed the prescribed limit as per act.

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Sent via Nokia Email

------Original message------
From: Ganesh Khemka <ganesh...@rediffmail.com>
To: "forum4ca" <foru...@googlegroups.com>
Date: Thursday, October 24, 2013 8:10:38 AM GMT-0000
Subject: [CA RUNGTA PD] Urgent Issue related with TDS

Dear Member,

A company has taken an office premises on rent and as per agreement the company has to reimburse towards electricity charges (sub-meter concept) on the actual units of electricity consumption at a pre-defined rate. The rate can be change if there is change in rate of govt. The landlord is issuing separate invoice for electricity apart from rent &amp; maintenance invoice mentioning the actual units consumed at the pre-determined rate and charging service tax on it because the said nature has been excluded from the negative list.
&nbsp;Kindly suggest whether the TDS has to deducted on the electricity charges or not.&nbsp;
With Regards
Ganesh &nbsp;

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[nund...@cal3.vsnl.net.in]

Normally no tds is required on reimbursement and this is law. But , in my opinion, as the reimbursement also includes maintenance charges ( as you said) it is better to have tds for compliance. Pure bill to bill reimbursement will not attract tds and in that case original bills ( electricity and maintenance ) need to be handed over to the payer. ...... Further the agreement for reimbursement need to separate from rent agreement.
CA DIPAKKUMAR MITRA
DKMC
KOLKATA 700001
9830047844
Sent on my BlackBerry® from Vodafone

[Nirupam Haldar]

Dear Mr  Mitra
Thanks. But why the clients then recover TDS from our TA Bills which are just reimbursement?
Nirupam Haldar

Sent from my Windows Phone

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From: nund...@cal3.vsnl.net.in
Sent: ‎28-‎10-‎2013 11:05

[Nirupam Haldar]

Dear Mr Chatterjee,
Thanks. I wish the clients became reasonable. All my clients big or small, and accounts departments headed by stalwarts or ordinary person like me, behave like Shylock and collect our pound of flesh in the form of TDS on behalf of the Department even from pure reimbursement bill.
A few years ago when I raised this issue with the then President of ICAI, I was informed that TDS was applicable even on  pure reimbursement bills!!
As the saying goes, an ordinary person can never win!
It has been a longish mail.
I hope you would not mind
Regards

Nirupam Haldar

Sent from my Windows Phone

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From: Shekhar Chatterjee
Sent: ‎29-‎10-‎2013 15:14
To: foru...@googlegroups.com; nirupa...@hotmail.com
Subject: RE: [CA RUNGTA PD] Urgent Issue related with TDS

Dear Mr Haldar

You have raised an interesting query in respect of TDS from TA bills. Based on my experience and well  tried common practice I would advise that bills for pure reimbursements should be separately raised / claimed to avoid any TDS. In case of pure reimbursements clubbed with other bills claiming payments TDS will be applicable on total payment including reimbursement. As an example reimbursement of Hotel Expense separately claimed would not attract TDS but a TA bill based on daily allowance would attract TDS. I have however not found any rule or circular to support this, though this treatment has never been contested by IT Authorities.

With Regards

S. Chatterjee 

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To: foru...@googlegroups.com
From: nirupa...@hotmail.com
Subject: RE: [CA RUNGTA PD] Urgent Issue related with TDS
Date: Mon, 28 Oct 2013 16:17:11 +0530

Dear Mr  Mitra
Thanks. But why the clients then recover TDS from our TA Bills which are just reimbursement?
Nirupam Haldar

Sent from my Windows Phone

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From: nund...@cal3.vsnl.net.in
Sent: 28-10-2013 11:05

[nund...@cal3.vsnl.net.in]

Respected Mr Halder,
Client should not deduct TDS on reimbursement of T A Bills. We should appraise them about the exact legal position as this.
It is advised to raise separate bill for reimbursement of TA bills.
Regards,
CA. DIPAKKUMAR MITRA

DKMC
KOLKATA 700001
9830047844

Sent on my BlackBerry® from Vodafone

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From: Nirupam Haldar <nirupa...@hotmail.com>

Sender: foru...@googlegroups.com

Date: Mon, 28 Oct 2013 16:17:11 +0530

To: foru...@googlegroups.com<foru...@googlegroups.com>

ReplyTo: foru...@googlegroups.com

Subject: RE: [CA RUNGTA PD] Urgent Issue related with TDS

Dear Mr  Mitra
Thanks. But why the clients then recover TDS from our TA Bills which are just reimbursement?
Nirupam Haldar

Sent from my Windows Phone

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From: nund...@cal3.vsnl.net.in
Sent: 28-10-2013 11:05

[car...@rediffmail.com]

As per the decision in Dr.William Schwabe vs ITO there will be no TDS on reimbursement of expenses provided a separate bill is made for the item. If a composite bill is made then TDS will be on the entire amount. Reimbursement does not partake the character of "income" and if there is no income question of TDS does not arise since TDS is after all "income tax". Recovery of TDS from TA bills, if bills are made separately, is entirely against the provisions of the Act. Please check your 26AS whether the amount has been deposited. CA. Rajib Choudhury

Sent on my BlackBerry® from Vodafone

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From: Nirupam Haldar <nirupa...@hotmail.com>

Sender: foru...@googlegroups.com

Date: Mon, 28 Oct 2013 16:17:11 +0530

To: foru...@googlegroups.com<foru...@googlegroups.com>

ReplyTo: foru...@googlegroups.com

Subject: RE: [CA RUNGTA PD] Urgent Issue related with TDS

Dear Mr  Mitra
Thanks. But why the clients then recover TDS from our TA Bills which are just reimbursement?
Nirupam Haldar

Sent from my Windows Phone

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From: nund...@cal3.vsnl.net.in
Sent: 28-10-2013 11:05