By Dr. V K Singhania
Introduction
The CBDT has introduced some new provisions in order to keep a check on tax revenue leakage. Section 194R, and 194 S have been added to Finance Act 2022. These are applicable from 1st July 2022.
Basics of Section 194R
- The framework of the new Section 194R applicable from 01-07-2022
- What is envisaged within the meaning of benefit or perquisite?
- Who will be treated as the provider of benefit or perquisite?
Fundamental Issues in Section 194R
- Is taxability of benefit or perquisite under Section 28(iv) mandatory for tax deduction under Section 194R?
- Does Section 194R apply to monetary benefit or perquisite?
- How to determine the nexus of benefit or perquisite with business or profession of deductee?
- At what stage of delivery of benefit or perquisite, tax be deducted?
- How is the value of benefit or perquisite to be determined?
- Can the CBDT Circular be binding on issues that do not address the removal of difficulties but enlarge the scope of tax liability?
Practical issues in Section 194R
- Issues concerning computing the annual threshold limit of TDS of Rs. 20,000
- Issues concerning TDS where benefit or perquisite is provided in-kind
- Issues concerning reimbursement of business-related expenses
- Liability for TDS in case of promotional schemes run by a business entity and goods provided to social media influencers for publicity
- Liability for TDS in case of business conferences and similar events
- Impact of Section 194R on various businesses, including Pharma, FMCG
- Practical challenges in connection with deduction of tax under Section 194R
194 S
Any person paying to any resident, any sum by way of consideration for transfer of virtual digital assets (VDA) TDS should be deducted.
TDS on payments other than salary
- TDS under sections 192A, 194, 194C, 194-I, 194-IA, 194-IB,194J, 194K, 194M, 194N, 194-O, 194P, 194Q, 194 R, 194S and 195.
- Consequences of TDS defaults
Faculty
