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Tds applicability

23 March 2019

Dear experts

My company has organised a contest where the winners who r also the employees of the company were awarded with travel vouchers of Rs 13 lakhs of indonesia and istanbul now my auditor is of the view that this amount distributed is a gift and should be included as an incentive in the salary and therefore Tds is also applicable as per 192 B

Kindly guide me whether the point raised is as per law and whether it can be termed as a perquisites

Please reply specifically

Thank you

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4 Replies

Mayur (Free Learner) (329 Points)
Replied 23 March 2019

Gifts up to Rs. 5,000 in the aggregate per financial year would be tax exempt in the hands of the employees. The excess value of gift over and above Rs. 5000/- would be taxed as a perquisite in the hands of the employees. So in your case it is right to say that TDS is applicable.

Ajay Venkatesh (Student CA Final ) (69 Points)
Replied 23 March 2019

as per sec 17. perquisite refers to non monetory benefit given to an employee free of cost or at concessional rate related to the scope of employement.

sec 56 2 x. taxation of gifts covers only money, movable and immovable property(capital asset sec 2(14).

In this case since it is a contest and outside the scope of employment will not be a perq and not covered by sec 56.2.x.

this being prize from contest will be treated as casual income under IFOS taxable at 30%.
where the value of such income in the hands any person is more than Rs.10000, tds to be deducted by the payer under section 194b at 30%.