New TDS Rule From July 1 To Affect Doctors, Social Media Influencers

The Union Budget had brought in the provision of TDS to check tax revenue leakage by inserting a new section, 194R, in the Income Tax Act, 1961.

From July 1, Tax Deducted at Source (TDS) on benefits received from business for sales promotion will be applicable to social media influencers and doctors. 

The Central Board of Direct Taxes (CBDT) has listed the rules under the new provision that explains the circumstances in which the new tax deducted at source (TDS) provision will be applicable. 

A section was introduced in the I-T Act which mandates deduction of tax at source at the rate of 10 per cent 

It requires TDS at 10 per cent for any person providing benefit exceeding ₹ 20,000 in a year to a resident.

What if a doctor is working at a hospital?

CBDT clarifies that in case of doctors receiving free samples of medicines while employed in a hospital, Section 194R would apply on distribution of free samples to the hospital. 

What does it mean for social media influencers?

Social media influencers will be liable to pay TDS if the equipment given to them as part of marketing efforts by a company is retained by the person 

If the product is retained, then it will be in the nature of benefit or prerequisite and tax is required to be deducted accordingly under section 194R of the Act 

Section 194R will apply to sellers giving incentives, other than discounts or rebates, which are in cash or kind, like cars, TV, computers, gold coins and mobile phones. 

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