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Additional Guidelines for removal of difficulties under sub-section (2) of section 194R of the Income-tax Act, 1961 The CBDT videCircular No 18 of 2022 dated September 13, 2022has issued additional Guidelines for the removal of difficulties under sub-section (2) of section 194R of the Income-tax Act, 1961 (the IT Act). Finance Act 2022 inserted a new section 194R in the Income-tax Act, 1961 (hereinafter referred to as the Act) with effect from July 01, 2022. 2. The new section manda
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FAQ :
The new guidelines are issued to remove difficulties and provide clarifications for the implementation of Section 194R of the Income-tax Act, which deals with tax deduction at source on benefits or perquisites.
No, one-time loan settlements or waivers granted by specified financial institutions, scheduled banks, cooperative banks, and others to borrowers upon settlement are clarified as not subject to tax deduction at source under Section 194R.
Reimbursement of expenses that are the liability of the service provider but are met by the service recipient is generally considered a benefit or perquisite. However, if the service provider acts as a 'pure agent' under GST rules and meets specific conditions, such reimbursed expenses are not treated as a benefit or perquisite.
Expenditure for participants staying beyond a day before the conference start or a day after the end is considered a benefit. For group activities where allocating benefits is difficult, the provider can opt not to claim the expense as deductible, thereby avoiding the need to deduct tax under Section 194R.
Yes, if tax has been deducted by the company on the gifted car and the dealer includes the benefit as income, the dealer can claim depreciation on the car as per the 'actual cost' which is the amount included as income.
No, the provisions of Section 194R are clarified as not applicable to benefits or perquisites provided by organisations like the United Nations, international organisations with income exemptions, embassies, high commissions, and consulates.
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