Budget 2022: Finance Ministry to clarify doubts on applicability of TDS on perks received in business, profession; new rule effective from 1 July

[ad_1]

The Indian Ministry of Finance will clarify doubts on the applicability of new tax deducted at source (TDS) provision regarding benefits or perquisites received in a business or profession, a PTI report said on Wednesday quoting a senior tax official.

Joint Secretary in the finance ministry Kamlesh C Varshney said that such benefits and perquisites are income and were always taxable whether received in cash or kind.

In the Budget 2022-23, provision of tax deducted at source (TDS) on such income was introduced to check tax revenue leakage. The new provision comes into effect from 1 July 2022, this report said.

The Budget brought in a new section, 194R in the I-T Act which requires deduction of tax at source at the rate of 10 per cent, by any person, providing any benefit or perquisite, exceeding Rs 20,000 in a year to a resident, arising from the business or profession of such resident.

See Zee Business Live TV Streaming Below:

“This (benefits and perquisites) is one area where nobody was paying taxes despite receiving benefits and perquisites in the course of business and profession… There is definitely a leakage here and therefore this section 194R. Whatever are the doubts, we are going to clarify the practical difficulties before July 1,” Varshney said while interacting with the members of industry chamber Assocham.
He said benefits like free medicine samples received by doctors, or free IPL tickets, foreign flight ticket received in the course of business or profession are income and should be disclosed in the income tax return.
Giving example, Varshney said if a doctor is receiving free samples it should be shown as benefit or perquisites and is income, irrespective of whether the pharma company is using it as sales promotion.
He said the company can claim deduction for such sales promotion expenditure, but that promotion would be a taxable income in the hands of the person receiving it. “Therefore you have to deduct TDS”.

Stressing that 194R is applicable to free samples received by doctors, Varshney said taxablility of such benefits cannot be based on the fact that since free samples are not being sold, it is not income. “Free samples have a value,” he said.

Inputs from PTI



[ad_2]

Source link

Della C. Mae

Next Post

The Planful Perform 2022 review

Fri May 27 , 2022
[ad_1] (CEO Grant Halloran – Planful Execute 2022) If you will find an overriding topic of Planful Complete 2022, it is really the want for finance groups to move collaboration out of the finance silo. We all know the underlying stressors: provide chain disruptions, economic adversity, and the need to  […]