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TDS on gifts received in kind

atul (student) (48 Points)

04 January 2008

if a bike has been received as a gift from a pvt. ltd co., is any TDS deductible from it?. . .if yes, then at what rate?

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6 Replies

MAHENDRA IYER (SERVICE) (315 Points)
Replied 04 January 2008

Tax is required to be paid under the provision of section 194B i.e @ 30% (+ Surcharge as applicable)

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CA. Aryendra (Chartered Accountants) (1233 Points)
Replied 04 January 2008

TDS will not be dedutible because it is a gift and company is liable to pay Fringe Benefit Tax on gift amount.

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 04 January 2008

To answere the question the relevant fact as to why the bike was given as gift is to be clarified first .............was it as sales incentive to customers or to employees or there was other reasons????

Gaurav Mahajan (Articled Assistent (CA Final)) (39 Points)
Replied 05 January 2008

Gift given in kind is not taxable in income tax at receiver's end. So TDS will not be deducted.

MAHENDRA IYER (SERVICE) (315 Points)
Replied 05 January 2008

The proviso to section 194B states that in case where the winnings are wholly in kind or partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of the winnings, the person responsible for paying shall, before releasing the winnings, ensure that tax has been paid in respect of the winning. Having said so i do agree to the fact that it is necessary to determine why Gift was given.