CBDT releases additional guidelines for TDS Deduction u/s 194R, TDS on perquisites

The Central Board of Direct Taxes (CBDT) has released guidelines for TDS Deduction u/s 194R i.e., TDS on perquisites.

CBDT has 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 of the Act.

Further, the Circular clarified that if the cost is reimbursed by the service recipient to the service provider amount incurred by the “pure agent” for which he is reimbursed by the recipient would not be treated as a benefit/ prerequisite for the purpose of section 194R of the Act, provided conditions of the pure agent are satisfied as per GST Act.

It has been further clarified that the tax under section 194R of the Act is not required to be deducted on the issuance of bonus or right shares by a company in which the public is substantially interested as defined in clause (18) of section 2 of the Act, where bonus shares are issued to all shareholders by such a company or right shares are offered to all shareholders by such a company, as the case may be.

Besides these issues, many other issues have been taken up in the additional CBDT guidelines.

The Original guidelines were issued on 16th June 2022 vide CBDT circular Number 12/2022

Click here to read the guidelines