Income tax new rules: You have to pay tax if it exceeds Rs 20,000? To whom does it apply?

Under Income Tax New Rules, When will you have to pay tax if it exceeds Rs 20,000? To whom does it apply? To whom does it apply

Under Income Tax New Rules, When will you have to pay tax if it exceeds Rs 20,000? To whom does it apply?

Companies offer a variety of gifts to their distributors and dealers as part of sales promotions. Companies offer them a variety of rewards if they cross the sales target. Foreign trip, cars, two-wheelers, gold coins give these kinds of gifts. Other companies, including pharma companies, offer similar gifts. You no longer have to pay tax on these.

The new rules will come into force on July 1 in relation to such matters. Companies are also taxed on foreign trips, cars, gold coins or other gifts they offer to their dealers and distributors. Gifts giving more than Rs 20,000 are taxable. Takes a 10 percent tax. 

A new section has been set up in the Finance Act 2022. Its name is 194r. Part of that is now paying 10 percent tax. 

Under Section 194R, 10 per cent tax deducted at source (TDS) will be deducted on gifts worth more than Rs 20,000 offered by companies to dealers and distributors. These TDS money is paid by the companies to the Income Tax Department. File a TDS return. 

This shows the Income Tax Department the extent to which companies are offering incentives to dealers. That means the information goes to the central government.

Companies generally receive income tax deduction on these expenses. Sales show up under promotion. However dealers will show these incentives in their revenue. 

Otherwise it may not show. But that is no longer the case. TDS will be cut. Therefore dealers are also required to show these gift receipts under income.

On the other hand, the central government expects indirect tax collections to fall short of budget estimates in the current financial year. Indirect tax collections are estimated at Rs. 13.38 lakh crore.

Revenue Secretary Tarun Bajaj attributed this to the central government's reduction in excise and customs duties. The decline is estimated to be around Rs 1.5 lakh crore. It is learned that the Center has recently reduced the excise duty to curb inflation. As well as cuts in customs duty on cooking oils.

Telangana

Tuday