A new Circular No. 18 of 2022 has been issued by the CBDT, providing clarifications on the issue of TDS on Perquisites U/S 194R of the Income Tax Act. Some of the clarifications are as follows:

 

1. It is clarified that one-time loan settlement with borrowers or waiver of loan granted on reaching settlement with the borrowers by the following would not be subjected to tax deduction at source under section 194R.

 

2. Any amount incurred by a “pure agent” defined in GST Valuation Rules, for which he is reimbursed by the recipient would not be treated as benefit/perquisite for the purpose of section 194R of the Act.

 

3. If out of pocket expenses (reimbursement) are already part of the consideration in the bill on which tax is deducted under the relevant provisions of the Act, other than section 194R, in accordance with the Circular No 715 dated 8th August 1995, it is clarified that there will not be further liability for tax deduction under section 194R of the Act.

 

4. The provision of section 194R is not applicable on benefit/perquisite provided by an embassy.

 

5. Tax is not required to be deducted on issuance of bonus or right shares by a company in which the public are substantially interested.

 

The copy of the circular is as under:

Additional Guidelines for clarifications on TDS on Perquisites defined U/S 194R by CBDT