TDS on reimbursement

[Guest]

One of our contractors has submitted a  separate bill for reimbursement of Travelling expenses (lumsum amount, without vouchers)  and another bill for design and drawing reimbusement expenses (lumpsum amount, with no vouchers). Should we deduct TDS on these bills.

Please explain with case references/notification/circular.  

[CAGOPALJI AGRAWAL]

As per circular No 715, TDS is deductible on gross amount. If re-imbursement bills are accompied with tickets etc. then there is scope of escape.

AI Summary

TDS on reimbursements may apply to lump sum bills absent supporting vouchers, potentially avoidable with documentary proof. TDS is generally deductible on the gross amount of payments; lump sum reimbursement bills without supporting vouchers are therefore subject to withholding, whereas reimbursements accompanied by authentic vouchers such as travel tickets may be excluded from gross taxable payments for TDS purposes.