A person, responsible for giving out any benefit or perquisites to a resident arising out of business/ profession, whether it’s convertible into money or not, requires to deduct TDS @ 10% on such aggregate amt.
Provided that no TDS if value doesn’t exceed 20k in a year.
In case of Individual or HUF whose turnover, gross sales, gross receipts during the preceding FY doesn’t exceed 1 cr and in the case of profession, gross receipts doesn’t exceed 50 lacs, the provision of 194R will not be applicable.
Scenario where this TDS will be applicable:
Whether benefits to employees under 17(2) is covered:
No, because it covers only in the course of business/ profession
Sponsored trips to clients:
Yes, achieving targets and sponsoring trips for clients would be covered as non-monetary benefits and would be liable for TDS
Prize Money awarded on winning lottery/ Games: Rummy India/ Dream11, Teen patti:
No, since this is not a benefit given in the course of business/ profession as it arises as a reward of making a payment towards playing/ gaming
Diwali/ Festive gifts to Suppliers:
Yes, this is a benefit in the course of business, TDS will be applicable.
Turnover Discount:
No, the amount is not in the form of any benefit as it will only reduce the amount of supply, so no TDS would be required.
However if the same is termed in the agreement/ contract as an incentive, TDS will be deductible.
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