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Sunday, 1 July 2012

TDS not on Reimbursements

TDS Provisions doses not require to deduct tax on reimbursement component, as they don't fall under the ambit of compensation. Indeed this clarity is not there to most of the Tax Deduction Officers of various organizations, hence the concerned payees should fight it out for non deduction of TDS on the reimbursement claims, this would not only improve their cash flow position, but would avoid unnecessary huge claims, that are invariably to be made in their Income Tax Returns.