CBDT issues Additional Guidelines for “Removal of Difficulties”, under Section 194 R, Sub-Section (2),ITA, 1961

On 13th September 2022, the TPL Division, Central Board of Direct Taxes
(CBDT), issued Circular No. 18 of 2022 – F.No. 370142/27/2022-TPL, stating the additional guidelines for “removal of difficulties” under Section 194 R, SubSection (2) of the Income Tax Act, 1961. This particular Circular was issued in regard to a previously issued Circular No. 12 issued by the CBDT, dated 16th June 2022.

Section 194R was added in the Income Tax Act, 1961, through the Finance Act, 2022, deemed effective from 1st July 2022. This Section mandates a person responsible for providing any benefit or prerequisite to a resident for deducting tax at a source of @10% of the value or aggregate of the value of such benefit or prerequisite before providing such benefit or prerequisite. The benefit or perquisite may or may not be convertible into money but should have arisen from carrying out any business or exercising a profession by such resident.