TDS on Reimbursed Salaries: Should LGSI Deduct It or Not?

Hi All,

I am Praveen working in Bangalore. We have some employees who are deputed to LGSI, and we are paying salaries to them, which will be reimbursed by LGSI. My question is whether LGSI should deduct TDS on it, or if it is a case where TDS is not applicable for the reimbursement of expenses.

Thanks,
Praveen

Hi Praveen,

LGSI has to deduct 10.5% of the total pay to your organization, and you have to deduct TDS from the employees' salary. If you have paid an excess amount, you can get a refund; there is no other choice to my knowledge.

Other members, please comment on this.

Regards,
Vijayakumar

Hi Praveen,

The employees are on your payroll. You are liable to recover the TDS and remit accordingly. As far as your business associate is concerned, if you have any margin in the amount reimbursed, then they will recover the TDS at 11.33% on the same under a fee for professional services. If the salaries paid and received are the same, then there is no TDS as there is no revenue for you.

Regards,
Shiva Kumar H