The new guidelines, issued by the Central Board of Direct Taxes, will come into effect from July 1
If a person keeps the product, it will have to be reported in the tax return and 10% TDS will need to be paid on the same under section 194R of the Finance Act, 2022
The TDS will not apply if the benefits availed by an individual do not exceed INR 20,000
The Central Board of Direct Taxes (CBDT) has issued new guidelines stating that social media influencers and doctors who get free merchandise for sales promotions will have to pay a 10% tax deducted at source (TDS) on such benefits.
The new guidelines will come into effect from July 1, 2022. The guidelines are a part of the Finance Act, 2020 to widen the tax base and ensure that the people who are benefiting from sales promotions report the same in their tax returns and pay 10% TDS on what the benefit is worth.