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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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Circular No. 12 of 2022
Guidelines for removal of difficulties under sub-section (2) of section 194R of the Incometax Act, 1961