It is commonplace for business entities to incentivize their stakeholders and partners such as dealers, distributors, or agents through different monetary and non-monetary ‘benefits or perquisites’. Discounts, gifts, free samples, sponsored travel packages etc. are some of the common illustrations of benefits and perquisites extended. Historically, these kinds of incentives have been taxable under the Income Tax Act, 1961. With effect from July 1st 2022, a new obligation has been introduced in the form of Section 194R which would require any person providing a benefit or perquisite to deduct tax at source @ 10% of the value or aggregate value of such benefit or perquisite.
Implementation of this new obligation could prove to be a challenge for the industry from a compliance perspective especially considering the various kinds of benefits and perks extended on a day-to-day basis by businesses. It is also pertinent to note that non-compliance of this provision has serious consequences ranging from non-allowability of expenditure as a deduction to levy of penalties.
The seminar will vivisect the newly introduced Section 194R and discuss its scope, implications and other consequences. It will focus on specific issues, such as:
- Meaning of ‘benefit or perquisite’
- The various kinds of ‘benefits or perquisites’ intended to be covered by the new Section 194R
- Manner of determining the value of benefits or perquisites extended
- Practical challenges in application of Section 194R
- Consequences of non-compliance
- Implications under the GST Act for benefits or perquisites
Venue: Varahari Hall, Ramada Plaza Chennai,
No 36 Sardar Patel Road, Guindy, Chennai -600032
Schedule:
Breakfast and Registration - 7:30 am – 8:30 am
Session- 8:30 am – 10:00 am
Speakers:
- Raghavan Ramabadran - Executive Partner, L&S, Chennai
- Rahul Jain – Director, L&S, Chennai
- Bharathi Krishnaprasad - Joint Director, L&S, Chennai