New TDS Rules under Section 194R
The concept of TDS was introduced in the Income Tax Act to collect tax at the very beginning of income. The TDS chapter in the Income Tax Act has various sections to deal with various types of income at different TDS rates. A new section, 194R, was added to the Income Tax Act.
The new TDS rule came into effect on July 1, 2022. It mandates the TDS at the rate of 10 per cent by an individual providing any benefit or perquisite to a resident that exceeds ₹20,000 in a year.
The new provision aimed to control tax revenue leakage. With the new TDS rules, TDS is applicable on a benefit of perquisite arising from a business or profession.
Nowadays, many social media influencers are promoting businesses. In return, they are getting many benefits in cash or kind. Many doctors are also getting benefits by involving in promotional activities of pharma companies. The new rule will put a check on such benefits and broaden the tax base.
The central government announced the new provision in the Union Budget 2022. Those who get more than ₹20,000 in cash or products in a year should disclose it in their income tax returns. They have to pay tax according to the value of the benefit they get.
The TDS is applicable for the products or freebies taken by social media influencers for business or sales promotions. However, the TDS will not be applicable if they return the products to the firm. The rule applies to all people giving incentives to any resident for their business promotion or marketing campaign.
The new rule will not apply to doctors working for a hospital as an employee if they get free samples of medicines. In such cases, the hospital is liable to deduct tax as per section 192.
Cash and sales discounts and rebates are not subject to TDS under the new rule, i.e. section 194R. Also, if a government organization or government hospital receives a benefit or perquisite, section 194R will not be applicable to it, since it is not engaged in business or profession.
Section 194R deals with the benefits or perquisites exchanged between professionals or business people. But, it is not associated with the employer and employee. If an employee receives benefits or freebies from the employer, then section 192 will be applicable.
Image by Aniket Sadekar from Pixahive (Free for commercial use / CC0 Public Domain)
You may also like
Image Reference: https://pixahive.com/photo/indian-currency-4/
Recent Posts
- New COVID-19 subvariants fuel case surge across IndiaKerala reported the highest number of COVID infections at 1,400, while Delhi logged 436 new cases.
- India-Armenia arms pact shifts regional power balanceNew Delhi’s defence ties with Yerevan have gained urgency and strategic depth.
- India prepares for historic return to spaceIndia is set to make space history once again as Group Captain Subhanshu Shukla gears up for the AX-4 mission on June 8. He will become the second Indian in space and the first to visit the International Space Station.
- New COVID-19 subvariants fuel case surge across India
What’s new at WeRIndia.com
News from 700+ sources
-
Infosys CEO among highest paid in Indian IT as compensation rose 22% to $9.4 million last fiscal
-
Central team led by Union Home Secretary Govind Mohan visits Manipur relief camps
-
Visit to India Was Trip of a lifetime: US Second Lady Usha Vance
-
Canada Question Period: Carney’s cabinet faces heated debate over ‘elbows up’ US tariff policy
-
Assam, Meghalaya CMs join hands to tackle Guwahati urban flooding
-
List of direct flights from Hyderabad airport to international cities may expand
-
WeRIndia – A News Aggregator
Visit werindia.com for all types of National | Business | World | Politics | Entertainment | Health related news and much more..
Leave a Reply