Is 194R is applicable in cash of Business & Promotion

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Section 194R of the Income Tax Act generally applies to gifts provided for business promotion, meaning TDS is applicable. However, if the expenditure is for a group activity and individual recipient allocation isn't feasible, TDS under 194R may not be attracted. This interpretation is supported by Circular 18/2022.

ASHISH ARAT

ASHISH ARAT (Querist)
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09 November 2022 Does Business & Promotion expenses attract deduction TDS under 194R?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 November 2022 Yes, it's applicable on gifts issued on business promotion.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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09 November 2022 However, if it is for a group activity and a reasonable allocation of such expenditure is not possible recipient wise, 195R doesn't attract.

Inference - Circular 18/2022 dt. 13-09-2022.

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