BooksIQAny person providing a BENEFIT or PERQUISITE (in cash or kind) arising from business / profession to a resident MUST deduct TDS @ 10% if the aggregate value exceeds ₹20,000 in the FY. Free samples, foreign trips, gifts to dealers all triggered.
Key points
- §194R requires ANY PERSON (other than an individual / HUF whose turnover did not exceed ₹1 Cr business / ₹50 L profession in preceding FY) responsible for providing to a resident ANY BENEFIT OR PERQUISITE — whether convertible into money or not — arising from business or exercise of profession by that resident, to deduct INCOME TAX at 10% on the VALUE / AGGREGATE VALUE of such benefit or perquisite.
- Threshold: TDS applies ONLY if aggregate value exceeds ₹20,000 in the financial year for the recipient.
- The provider must ensure tax has been paid before releasing the benefit;
- if benefit is wholly in kind / partly in kind with insufficient cash component to deduct, the provider must ensure tax is paid (often by collecting TDS amount from the recipient or grossing-up).
- EXAMPLES per CBDT Circular 12/2022 and 18/2022: free samples to retailers, sponsored foreign trips for dealers, gifts > ₹20k to professionals, cars / mobile phones gifted to consultants, conference / travel reimbursements beyond actuals.
- EXEMPTIONS: government / public-sector benefits;
- benefits already taxable as salary (covered by §192).
- Reported in Form 26Q.
Reference: §194R, ITA 1961 (Finance Act 2022) — under ITA 2025 (FY 26-27 onwards), this is §393(1) Sl.8(iv)
This page is general information for Indian businesses, current as of the
financial year shown above — not legal or tax advice. Tax law changes,
and how a provision applies depends on your specific facts. Confirm the
current position with a qualified professional before you act.
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