CBDT issues Additional Guidelines For TDS under section 194R

Additional Guidelines for removal of difficulties under sub – section ( 2 ) of section 194R of the Income – tax Act , 1961

Finance Act 2022 inserted a new section 194R in the Income – tax Act , 1961 ( hereinafter referred to as ” the Act ” ) with effect from 1st July 2022 .

2. The new section mandates a person , who is responsible for providing any benefit or perquisite to a resident , to deduct tax at source @ 10 % of the value or aggregate of value of such benefit or perquisite , before providing such benefit or perquisite . The benefit or perquisite may or may not be convertible into money but should arise either from carrying out of business , or from exercising a profession , by such resident .

3. This deduction is not required to be made , if the value or aggregate of value of the benefit or perquisite provided or likely to be provided to the resident during the financial year does not exceed twenty thousand rupees .

4. The responsibility of tax deduction also does not apply to a person , being an Individual / Hindu Undivided Family ( HUF ) deductor , whose total sales gross receipts T gross turnover from business does not exceed one crore rupees , or from profession does not exceed fifty lakh rupees , during the financial year immediately preceding the financial year in which such benefit or perquisite is provided by him .

5. Sub – section ( 2 ) of section 194R of the Act authorises the Board to issue guidelines for removal of difficulties , with the approval of the Central Government . These guidelines are required to be laid before each House of Parliament and are binding . on the income – tax authorities and the person providing the benefit or perquisite .

6. Accordingly , in exercise of the power conferred by sub – section ( 2 ) of section 194R of the Act , CBDT had issued guidelines in the form of the Circular no 12 of 2022 dated 16th June 2022. Subsequently , some more clarifications are requested by stakeholders Accordingly , this Circular is also issued under sub – section ( 2 ) of section 194R to provide clarification on issues which will help to remove difficulties in implementation of this provision . various

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