New TDS provision u/s 194R effective from 1st July 2022:

A person, responsible for giving out any benefit or perquisites to a resident arising out of business/ profession, whether it’s convertible into money or not, requires deducting TDS @ 10% on such aggregate amt.

Provided that no TDS if the value doesn’t exceed 20k in a year.

In the case of an Individual or HUF whose turnover, gross sales and gross receipts during the preceding FY don’t exceed 1 cr and in the case of the profession, gross receipts don’t exceed 50 lacs, the provision of 194R will not be applicable.

The scenario where this TDS will be applicable

Q. Whether benefits to employees under 17(2) are covered:
Ans. No, because it covers only the course of business/ profession

Q. Sponsored trips to clients

Ans. Yes, achieving targets and sponsoring trips for clients would be covered as non-monetary benefits and would be liable for TDS

Q. Prize Money awarded on winning lottery/ Games: Rummy India/ Dream11, Teen Patti:

Ans. No, since this is not a benefit given in the course of business/ profession as it arises as a reward of making a payment towards playing/ gaming

Q. Diwali/ Festive gifts to suppliers:
Ans. Yes, this is a benefit in the course of business. TDS will be applicable.

Chartered Accountant In Pimpri Chinchwad.

Chartered Accountant in Pimpri Chinchwad

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