Income Tax - Withholding Tax on Benefits or Perquisite under section 194R

What is Section 194R?

For whom it is Applicable?

Exemptions

When?

Other points to be noted

Time Limit	Form to be filed	Certificate to be issued	Clarification required From Govt
TDS to be deducted and deposited within 7 days after end of the month	Form 26Q to be filed by TDS deductor	TDS deductor shall issue certificate in form 16A on quarterly basis	No Clarity on the meaning to be assigned For value of benefit or perquisite

TDS u/s 194R will apply on.

FAQ's.

1. Whether sales discount, cash discount and rebates are benefit or perquisite?

Ans. No, But for following benefits TDS is to be deducted

2.How is the valuation of benefit/perquisite required to be carried out?

The valuation would be based on fair market value of the benefit or perquisite except in following cases:-

Nature	Valuation
Purchased the Benefit/perquisite before providing to recipient	Purchase price
Manufactures Such Benefit/Perquisite	Price charged to customers for such items

Whether GST is to be considered while computing value under 194R ?

Ans. No

3.Reimbursement of expenses Incurred by Service Provider?

Incurred(Invoice) in the name of?	194R applicable or not?
Recipient	Applicable
Benefit provider	Not Applicable

4.How Tax has to be deducted?

Ans. Two options have been provided by government

5.How the limit of 20000 is to be computed for FY 22-23

Incurred Between April to June 22	Incurred After July 1st 2022	Aggregate value of benefit or perquisite	Section 194R applicable?	Amount on which tax to be deducted?
15000	0	15000	No	0
10000	15000	25000	Yes	15000
35000	0	35000	No	0

Disclaimer:

“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of situation.”

Prepared On:
02/08/22

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Income Tax - Withholding Tax on Benefits or Perquisite under section 194R

What is Section 194R?

For whom it is Applicable?

Exemptions

When?

Other points to be noted

TDS u/s 194R will apply on.

FAQ's.

1. Whether sales discount, cash discount and rebates are benefit or perquisite?

2.How is the valuation of benefit/perquisite required to be carried out?

Whether GST is to be considered while computing value under 194R ?

3.Reimbursement of expenses Incurred by Service Provider?

4.How Tax has to be deducted?

5.How the limit of 20000 is to be computed for FY 22-23

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