New TDS Provisions (Section 194R and section 194S of the Income-tax Act, 1961) applicable from 01.07.2022
Dear Professional Colleague,
It is an endeavour of Direct Taxes Committee to update members regarding any changes or amendments made in Direct Taxes.
Section 194R and 194S was inserted in Income-tax Act, 1961 vide Finance Act 2022.
Section 194R: Deduction of Tax on benefit or perquisite in respect of business or profession: The section provides that a person responsible for providing to a resident, any benefit or perquisite, whether convertible into money or not, arising from carrying out of a business or exercising of a profession by such resident, shall before providing such benefit or perquisite deduct tax @ 10% in respect of such benefit or perquisite.
Section 194S: Payment on transfer of Virtual Digital Asset: The section provides that a person responsible for providing to a resident, any sum by the way consideration for transfer of virtual digital asset shall at at the time of credit of such sum to the account of the resident or at the time of payment of such sum by any mode, whichever is earlier deduct tax @ 1% on it.
Important highlights of the aforesaid sections for quick reference:
|
Particulars |
Section 194R | Section 194S |
| Tax Rate | 10% | 1% |
| Threshold Limit | No tax is deductible if aggregate value of the benefit or perquisite to a resident does not exceed Rs 20,000/- during financial year
|
No tax is to be deductible if the consideration is payable by any person other than a specified person to a resident and the value or aggregate value of such consideration does not exceed Rs 10,000/- during the financial year. |
| Non Applicability | In case of Business- Individual or HUF, whose total sales or turnover does not exceeds Rs. 1 Crore or in case of Profession- Gross receipts does not exceeds Rs. 50 lakhs , during the financial year immediately preceding the financial year in which such benefit or perquisite, as the case may be, is provided.
|
No tax shall be deducted if the consideration is payable by a specified person to a resident and the value or aggregate value of such consideration does not exceed Rs 50,000/- during the financial year Specified Person Definition- Explained in Section 194S of the Act. |
Note: In case of payments made to non-resident, Provisions for TDS made under Section 195 of the Act should be referred. For knowing provisions, please refer: https://www.incometaxindia.gov.in/pages/acts/income-tax-act.aspx
Warm Regards,
Chairman
Direct Taxes Committee
The Institute of Chartered Accountants of India
Which TDS, form established by Traces, against TDs Sec. 194(R).