The new provisions will be applicable to those who give benefits or other facilities to anyone in a financial year exceeding Rs 20,000. This payment should be for business benefits or other facilities.
CBDT had issued circular on June 16
According to the circular issued by the CBDT, those paying on benefits, materials or payments exceeding Rs 20,000 in a financial year will have to deduct 10 per cent tax. TDS deduction will not be applicable regardless of whether the benefit paid is cash or any other physical material or a mix of both. The CBDT has said that it can be benefits, loan waiver, rent free residence, furniture, land, car or other gifts. However, discounts and rebates offered by sellers on MRP have been excluded.
TDS can be deducted on these
It has been told in the circular that there are some other things on which TDS can be considered for deduction. For example, free sample distribution, sponsored trips, free event tickets, free sample medicines to a doctor or other medical practitioner, etc. may be included in this. TDS will not be deducted if the benefit is given to an entity that does not do business, such as a government hospital.
TDS in respect of Influencer
If a company gives a product to a social media personality or influencer for promotion and he keeps it with him, then TDS will be deducted on it. However, TDS will not be deducted if the product is returned after use.
TDS on business conference
If the conference is being held to launch a new product or to educate about the product, then TDS will not be charged. However, TDS will be levied on conferences organized for incentives and benefits given to dealers to achieve a specific target.
