The new Tax deducted at Source rule will be applicable on doctors and social media influencers. The Central Board Of Direct Taxes released new guidelines which will be applicable from 1 July.
A 10% TDS on benefits received from business for sales promotion will be payable by social media influencers If the product is retained by them.
Though, if they return the product to the company, then this rule is not applicable on them.
However, the new rules will be applicable to a person when the benefits received on sales promotions exceed 20,000 in a year to a resident.
CBDT said that “whether this (the product given for sales promotion activity in social media) is beneficial or perquisite will depend upon the facts of the case.
In case of benefit or perquisite being a product like a car, mobile, outfit, cosmetics etc. and if the product is returned to the manufacturing company after using for rendering service, then it will not be treated as a benefit or perquisite for section 194R of the Act (the TDS provision).”
Joint Secretary in the Finance Ministry, Kamlesh C Varshney stated the gains which are medicine samples received by doctors, foreign flight tickets or free Indian Premier League (IPL) tickets in the course of business and more.
He further describes that these things should be publicized while submitting the income tax return and should not be disguised in the manner that these things have not been sold.
In the Union Budget, the new provision of 194R was added in the Income Tax Act 1961 for the purpose to stop tax revenue leakage.
The 194R will be applicable on cash incentives or other incentives like a car, mobile, TV, computer, gold coins etc. other than a rebate or discount which have been given by the sellers.
Central Board of Direct Taxes said that the 194R will be applicable on distributors of free samples of medicines, in case of a doctor is employed in a hospital receives such samples from the distributor.
Therefore, in the case of a doctor employed in a hospital as a consultant then the 194R will be applied firstly on hospital, in the case of a government entity which does not carry out any commercial activities, the 194R will be not applicable on them.
