Section 194R – TDS on Benefits/Perquisites

1. SECTION 194R – TDS ON BENEFITS/PERQUISITES https://taxguru.in/income-tax/section-194r-tds-benefits-perquisites.html Article analyses Section 194R incorporating the clarifications of CBDT vide Circular No. 12/2022 dated 16.6.2022. SECTION 194R – TDS ON BENEFIT / PERQUISITE TO RESIDENT BY PERSON HAVING INCOME FROMBUSINESS/PROFESSION Applicablefrom 1.7.2022 Applicableto Any person having income from business and professionexcept: Individuals/HUF with turnover from business less than Rs.1 crore or profession less than Rs.50 lakhsin preceding financialyear Limitapplicable Rs. 20,000 in aggregate including the provision made in the period 1.4.2022 to30.6.2022 However, provision of 1.4.2022 to 30.6.2022 not liable forTDS Rateapplicable 10% Nature of payment for TDS deduction under Section194R Any benefit or perquisite provided in cash or kind paid to aresident Recipient The entity to whom the benefit is given irrespective of whoever enjoys it such as director, partner, employee, relative,etc. Time of deduction for TDS deduction under Section194R Prior to payment torecipient

2. Discharge of TDS liability under Section194R Due date Type ofpayment Who willpay of Proof ofpayment Amount on which tax tobe payment 7th of the next Cash Payer Recipient TDSCertificate Cashgiven month Prior to frompayer receipt Advance taxchallan Fair Market Value ofbenefit/p Kind or partly in kind OR and partly incash Payer 7th of the next Fair Market Value ofbenef TDSCertificate month INCLUDING the amount ofT Fair Market Value of benefit/perquisite inkind If purchased by payer then FMV will be purchaseprice If manufactured by payer then selling price will be theFMV Types of payments considered asbenefit/perquisites Whether ornot YES NO YES NO YES YES YES YES YES NO NO YES Paymenttype Capital assets such as car, land,etc. Sales discount/Cash discount/Rebates tocustomers FreeSamples Offering more items at the price of feweritems Incentives such as car, TV, phone,gold Sponsoring vacations for recipient or his/herrelatives Providing free tickets toevents Medicine samples free to medical practioneers Social media influencer if they retain theproduct Social media influence if the return theproduct Out of pocket expenses incurred by service provider with invoice in name of serviceRECIPIENT Out of pocket expenses incurred by service provider with invoice in name of servicePROVIDER

3. AllDealerGENERALconferencestoeducatedealers/customersfornewproducts,teachingsales NO techniques, addressing queries, reconciliation of accounts,etc. Dealer conference for specific participants selected on the basis of achievement of targets,etc. Leisure component of general dealerconferences Expenses of accompanying family at general dealerconferences Expenses of prior/subsequent stay of participants at general dealerconferences YES YES YES YES