Section 194R- an attempt to reduce the perquisites provided in cash

The government has recently introduced the section 194R. Lets have the detail analysis on the same.

The companies used to provide the benefits and perquisites to its employees or the partners in cash or kind and used to claim it under section 28(iv) of Income Tax Act. Incase the benefits were provided in cash then it was shown in the ITR of Person receiving the benefits but if was provided in kind then the person receiving it did not show it in the ITR and it went unaccounted in his hands

To curb this practice the govt. has introduced section 194R applicable from 1st July, 2022. Under this section the company/ individual providing such benefits to any resident will have to deduct the TDS @10% on the value of perquisites and the benefits provided. Incase the benefit is in kind then the amount of TDS has to be paid from the pocket of the provider.

However this Section 194R is not applicable to the HUF/ individual where total sales from business does not exceed 1cr or receipts from profession does not exceed 50 Lacs.

Also no TDS is deducted if the total amount of benefits does not exceed 20K per person.

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Qualification: CA in Practice
Company: Nikita Goel & Associates
Location: Gurgaon, Haryana, IN
Member Since: 20 Jun 2019 | Total Posts: 3

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