Thread by @YashDhanuka14

New #TDS provision u/s 194R effective from 1st July 2022:

A thread 🧵 on TDS on benefits/ Perquisites:

1/n

A person, responsible for giving out any Benefit or Perquisites to a resident arising out of business/ profession, whether it's convertible into money or not, requires to deduct TDS @ 10% on such aggregate amt.

Provided that no TDS if value doesn't exceed 20k in a year

2/n

In case of Individual or HUF whose turnover, gross sales, gross receipts during the preceding FY doesn't exceed 1 cr and in the case of profession, gross receipts doesn't exceed 50 lacs, the provision of 194R will not be applicable

3/n

Scenario where this TDS will be applicable:

🧲 Whether benefits to employees under 17(2) is covered:
No, becoz it covers only in the course of business/ profession

🧲 Sponsored trips to clients:
Yes, Achieving targets and sponsoring trips for clients would be covered

4/n

🧲 Prize Money awarded on winning lottery/ Games: Rummy India/ Dream11, Teen patti

No, since this is not a benefit given in the course of business/ profession as it arises as a reward of making a payment towards playing/ gaming

🧲 Diwali/ Festive gifts to Suppliers':

5/n

Yes, this is a benefit in the course of business, TDS will be applicable.

🧲 Turnover Discount:

No, the amt is not in the form of benefit as it will only reduce the amount of supply, so no TDS would be reqd.

6/n

However if the same is termed in the agreement/ contract as an incentive, the amt is deductible.

Let me know if you have any questions or suggestions on this.

RT if you find it informative!😀