The Central Board of Direct Taxes dated 13 September furnished a circular for the elimination of the issues in Section 194R that obligated the responsibility to the individual for giving the advantages to the resident to deduct tax at source with 10%.
Before that, the Finance Act 2022 inserted a new section 194R in the Income-tax Act, 1961, which come into force from the date 1 July 2022.
As per the Finance Act 2022, the same sections made it compulsory for the person to deduct tax at source with 10% of the value or average value of the same advantage prior to furnishing the same advantage. The provided benefit may or may not be transformed into money however must come from doing the business or from practising the profession through the same resident, as per the mentioned rules.
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Beyond this, the deduction under section 194R would not be needed to incur when the value of the same advantage furnished to the resident in the fiscal year is less than Rs 20,000. Indeed the tax deduction obligation is indeed not applicable to the person, an individual, or Hindu Undivided Family (HUF) deductor whose gross turnover from business is less than Rs 1 crore or from the profession is less than Rs 50,000,00 during the financial year.
The CBDT furnished the policies in the form of circular number 12 of 2022 on 16 June 2022 practising the power granted by sub-section (2) of section 194R of the Act. This circular, issued under sub-section (2) of section 194R delivers clarification on issues that will assist to eliminate the issues in the execution of this provision.
From the income tax department, it is obvious that the circular purpose is to eliminate the execution of the provision of section 194R of the income tax act which does not affect the in-hand taxability income which is controlled via the related provision of the act.
Apart from other things CBDT mentioned some doubts and queries via assessee related to the elimination of the issues in Section 194R.
