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194R Regulations Summary
- The provider of any benefit or perquisite given to a dealer, supplier, influencers or similar partners resulting from a business or professional relationship.
- Aggregate value or the benefit exceeds INR 20,000 in the financial year.
- The Provider to deduct tax at the rate of 10 percent before providing such benefit or perquisite.
- The aggregate annual threshold of Rs 20,000 is to be considered for the entire FY 2022-23 with effect from April 1.
- However, TDS liability will trigger only on the benefit or perquisite provided on or after July 1, 2021.
- Higher rate of 20% TDS applicable for dealers who do not have PAN or have filed their Tax returns.
- TDS shall apply to all modes of providing benefit or perquisite, whether in cash or kind or partially in cash and kind.
- It has been clarified that tax shall be deducted in the name of the dealer irrespective of the utilisation of such benefit/perquisite.
- This would result in TDS credit and corresponding income as per Form 26AS in the name of the dealer.
- Business conferences organised with the prime object of educating dealers/customers about new products, sales techniques and other similar business-related objectives have been excluded from the purview of TDS liability subject to certain conditions.
- However, expenses on prior stays or overstay beyond the dates of business conferences continue to attract perquisite TDS (At fair value).
- Certain exemptions apply in case of samples that are returned etc.
* Applicable where provider turnover is more than INR 50 L in the case of companies
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Reporting Capabilities
- Our reporting Suite keeps a record of all load and redeem transactions by recipient.
- Generated on a monthly basis with a clear view of TDS liability by recipient.
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194 Resources
| Summary | Brief description | Date | Link |
|---|---|---|---|
| Circular No. 12 of 2022 | Guidelines for removal of difficulties under sub-section (2) of section 194R of the Incometax Act, 1961 | 16 Jun 22 | https://incometaxindia.gov.in/communications/circular/circular-no-12-2022.pdf |
| Discussion on implications of 194R regulations | Dissecting the CBDT Circular, Section 194R: TDS on benefits and perquisites | 28 Jun 22 | https://www.ey.com/en_in/webcasts/2022/06/dissecting-the-cbdt-circular-section-194r-tds-on-benefits-and-perquisites |
| 194R regulations deep dive | A well documented discussion on various aspect of the regulation | 1 Jul 22 | https://incorpadvisory.in/blog/section-194r-take-a-dive-into-the-ocean-of-194r/ |
| Circular No 18 of 2022 | Additional Guidelines for removal of difficulties under sub-section (2) of section 194R of the Income-tax Act, 1961 | 13 Sep 22 | https://incometaxindia.gov.in/communications/circular/circular-no-18-2022.pdf |