This rule of TDS is changing from July 1, these people will also have to pay tax
The new TDS rule is coming into effect from July 1. New Tax Deducted at Source (TDS) The rule will apply to the business of sales promotion, which will affect social media influencers and doctors. Central Board of Direct Taxes (CBDT) has issued guidelines for this new provision of TDS. This rule was announced in the recent budget. Earnings from the business of sales promotion have been brought under the purview of TDS to prevent leakage of revenue. For this a new section 194R has been added in the Income Tax Act 1961.
The Finance Ministry has given complete information about this new rule. The benefits of this provision are also explained. The new rules include free medicines taken by doctors, foreign flight tickets or free IPL tickets. He said that if any such benefit is availed, the same will have to be disclosed in the income tax return filing. The tax return cannot be denied on the ground that these benefits are not available through purchase but are available for free.
What is the new rule?
The new TDS provision states that section 194R will also apply to sellers who offer incentives other than rebates or rebates which are given in cash or in any other goods such as cars, TVs, computers, gold coins and mobile phones . If a doctor works in a hospital and takes free sample of medicine, then section 194R will be applicable on distribution of free sample of medicine in the hospital. In such a situation, the hospital as an employer can keep the sample tax free and deduct TDS of the employee under section 192.
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For doctors working as consultants in a hospital and receiving free samples, TDS would be applicable on the first hospital, which would require tax deduction under section 194R on the earnings of consultant doctors. According to CBDT, TDS rule will not be applicable to government hospitals as such institutions do not carry on such business or business. The recent budget includes some announcements on TDS and taxes, including commercial promotions for doctors and social media influencers. This rule of TDS will be applicable from July 1.