194r tds: Section 194R of the Income Tax

Section 194R of the Income Tax Act mandates the deduction of tax at source ( TDS ) on any benefits or perquisites provided in the course of business or professional activities. This section ensures that recipients of non-monetary or indirect benefits from businesses or companies are taxed appropriately, thus closing potential loopholes where income could otherwise go untaxed.Section 194R applies to any entity providing such benefits—whether in cash, property, or a combination of both—and ... Get clear guidelines on implementation of Section 194R of the Income-tax Act, including when to deduct TDS on benefits or perquisites, threshold limits, and exemptions. Section 194R of the Act, was introduced with the aim of addressing potential tax leakage arising from non-cash benefits and perquisites often not reported by recipients such as sponsored foreign trips, cars, free samples and expensive gifts. The TDS to be charged under Section 194R is 10%, which will come into effect from July 1, 2022. It applies only to resident recipients (receivers) of benefits or perquisites.