top of page

Guidelines for removal of difficulties under sub-section (2) of section 194R of the Income tax Act,

Finance Act 2022 insettled a new section 194R in the Income-tax Act, 1961 (hereinafter referred to as "the Act") with effect from I" July 2022. The new section mandates a person, who is responsible for providing any benefit or perquisite to a resident, to deduct tax at source @ IO% of the value or aggregate of value of such benefit or perquisite, before provid ing such benefit or perquisite. The benefit or perquisite may or may not be convertible into money but should arise either from carrying out of busi ness, or from exercising a profession, by such resident. This ded uction is not required to be made, if the va lue or aggregate of va lue of the benefit or perquisite provided or like ly to be provided to the resident during the financial year does not exceed twenty thousand rupees. The responsibility of tax deduction also does not apply to a person, be ing an Individual/Hindu undivided family (HUF) deductor, whose total sales / gross receipts / gross turnover from business does not exceed one crore rupees, or from profession does not exceed fifty lakh rupees, during the financia l year immediately precedi ng the financial year in which such benefit or perquisite is provided by him. Sub-section (2) of section 194R of the Act authorises the Board to issue gu idelines, for removal of difficu lties, with the approva l of the Central Government. These guidelines are req uired to be laid before each House of Parliament and are binding on the income-tax authorities and the person providing the benefit or perquisite. Accordingly, in exerc ise of the power conferred by sub-section (2) of section 194R of the Act, the Board, with the prior approval of the Central Government, hereby issues the foll owing guidelines:-

Want to read more?

Subscribe to mycritixe.com to keep reading this exclusive post.

bottom of page