CBDT Guidelines/ FAQs on TDS u/s 194R on Provision of Benefits/ Perquisites

To help stakeholders who are experiencing problems with TDS under Section 194R(2) on the provision of Benefits/Perquisites, CBDT has released guidelines and frequently asked questions (FAQs).

With regard to the TDS on the provision of benefits and perks under Section 194R(2) of the Income-tax Act of 1961, the CBDT has issued the first set of guidelines and frequently asked questions (FAQs) in Circular 12/2022. Later, CBDT released additional FAQs and guidelines in Circular 18/2022 to address questions about TDS on the provision of benefits and perks under Section 194R(2) and to provide clarification.

It should be noted that a new section 194R has been added to the Finance Act of 2022 and is effective as of July 1st, 2022. Any person who gives a resident a benefit or perk in the course of their employment is required by the new section 194R to withhold tax at source at a rate of 10% of the value of the benefit or perk before giving it to the resident, whether the benefit or perk is convertible into money or not.

However, such a deduction is not required if the value of such benefit/ perquisite does not exceed Rs. 20,000 during the fiscal year or if the total sales/ gross receipts/ gross turnover of the individual/ HUF carrying on business/ profession does not exceed Rs. 1 Crore/ 50 Lacs respectively during the fiscal year immediately preceding the relevant fiscal year.

In exercising the authority granted, the CBDT has issued guidelines/ FAQs to assist stakeholders in resolving issues relating to TDS under Section 194R(2) on the Provision of Benefits/ Perquisites.

CBDT Income Tax Circular 12/2022 dt. 16/06/2022: Guidelines/ FAQs for removal of difficulties in TDS on Provision of Benefits/ Perquisites u/s 194R(2) of the Income-tax Act, 1961

CBDT Income Tax Circular 18/2022 dt. 13/09/2022: Additional Guidelines/ FAQs for removal of difficulties in TDS on Provision of Benefits/ Perquisites u/s 194R(2) of the Income-tax Act, 1961