TDS on reimbursement of freight

[Atul Kumar]

We have placed a purchase order in a vendor for purchase of sand. As per po terms rate is ₹ 1000 per ton for sand and ₹ 1000 per ton as freight.

Vendor is giving bills for sand and freight separately. Are we suppose to deduct TDs on reimbursement of freight.

As per PO terms freight is inclusive of service tax.

[Ganeshan Kalyani]

TDS is not applicable on reimbursement of expense if supported with actual bills.

AI Summary

TDS on reimbursement: no deduction required where freight reimbursement is supported by actual bills under income tax law. TDS is not applicable on reimbursement of expense if supported with actual bills; the freight amount treated as a reimbursable expense, so no TDS deduction is required where the vendor furnishes genuine bills evidencing the freight.