#Tds on benefit or perquisite in respect of business or profession from 01.07.2022-Section #194R, #Incometax

 

What is Section 194R of Income tax Act,1961 ??

Any person responsible for providing to a resident, any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession, by such resident, shall, before providing such benefit or perquisite to such resident, ensure that tax has been deducted in respect of such benefit or perquisite at the rate of ten per cent of the value or aggregate of value of such benefit or perquisite

What Happens if benefit or perquisite is wholly in kind or partly in cash ??

Provided that in a case where the benefit or perquisite is wholly in kind or partly in cash and partly in kind but such part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of such benefit or perquisite, the person responsible for providing such benefit or perquisite shall, before releasing the benefit or perquisite, ensure that tax required to be deducted has been paid in respect of the benefit or perquisite

This Section does not apply to

  • Where the value or aggregate of value of the benefit or perquisite provided or likely to be provided during the financial year does not exceed twenty thousand rupees
  • To a person being an individual or a Hindu undivided family, whose total sales, gross receipts or turnover does not exceed one crore rupees in case of business or fifty lakh rupees in case of profession, during the financial year immediately preceding the financial year in which such benefit or perquisite, is provided by such person.

Notes:-

  1. “Person responsible for providing” means the person providing such benefit or perquisite, or in case of a company, the company itself including the principal officer thereof.

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