Page 16 - Banking Finance July 2022

ROUNDUP

and have a branch in GIFT-IFSC," the ducted at Source (TDS) norms coming benefit from such sales promotion ex-
central bank said in a release recently. into effect from next month. How- penditure by businesses report it in
ever, it will be applicable if these are their tax returns and pay tax on what
According to the notification, the bank
earned through business or profession. the benefit is worth.
will ensure adherence to guidelines on
capital requirements and management According to the Reserve Bank of In- Social media influencers will liable to
of liquidity risk for their exposures aris- dia, as on April 30, the credit cards is- pay TDS if the equipment given for
ing from its branch in GIFT-IFSC func- sued in India are at 7.51 crore, while them as part of marketing efforts by a
tion as clearing member. that of mobile wallets is over 247 crore. company is retained by the person. TDS
will not apply if it is returned to the
The Finance Act 2022 inserted a new
Govt mulls raising ceiling section 194R in the Income-tax Act, company, CBDT said.
1961, with effect from July 1. The new
for credit under Agricul-
section mandates a person responsible Virtual digital assets:
ture Infrastructure Fund for providing any benefit or perquisite
Norms laid out for tax de-
The Centre is planning to increase the to a resident, to deduct a tax at source
ceiling on credit under Agriculture In- @10 per cent of the value or aggre- duction onus
frastructure Fund (AIF) from current gate of such benefit or perquisite, be-
Issuing detailed guidelines on the TDS
Rs. 2 crore after finding that those fore providing such benefit or perqui- rule for virtual digital assets (VDAs)
who are genuinely interested to set up site. such as cryptocurrencies, the Central
or expand units are not getting suffi-
The benefit or perquisite may not be Board of Direct Taxes (CBDT) laid down
cient credit at the subsidised interest
convertible into money, but should the various scenarios on how the tax
rates.
arise either from carrying out business will be applicable and on whom will the
At a stakeholders' meet on AIF, many or from exercising a profession, by such onus to deduct it lie.
entrepreneurs had complained that resident. However, the new norm will
With introduction of Section 194S in
the current credit limit is too low and apply only when the value exceeds Rs.
the Income-tax Act through the Fi-
insufficient to raise warehousing ca- 20,000 in a year.
nance Act, 2022, a tax deducted at
pacity, said Samuel Praveen Kumar, a
source (TDS) of 1 per cent will be lev-
joint secretary in Union Agriculture
Freebies to doctors, social
ied on transfer of VDAs effective July 1
Ministry. "We are trying how best it
media influencers liable if the value of transactions exceeds Rs
can be enhanced," he said addressing
10,000 in a year.
an event on agri-warehousing, for TDS
organised by NCDEX. The CBDT has, in the guidelines, de-
Doctors and social media influencers
fined the responsibilities of deducting
He also said as many as 70 per cent of are among those who will be subject
the tax in various cases. For example,
the applications under AIF scheme is to a new rule which mandates a 10%
in case the transfer of VDA takes
for dry storage, whereas there is tax deducted at source (TDS) on free-
place on or through an exchange, and
equally a need for expanding the ca- bies they receive from businesses for
the VDA being transferred is not
pacity under cold storage. sales promotion.
owned by the exchange, tax may be
A set of guidelines from the Central
deducted by the exchange making the
Loyalty points on credit Board of Direct Taxes (CBDT) explains
payment to the seller.
the circumstances in which the new tax
card, wallet money not to
deducted at source (TDS) provision However, in case the payment be-
attract TDS which kicks-in from 1 July will apply. tween the seller and the exchange is
Loyalty/rewards points earned on a The provision was introduced in the being done through a broker, the re-
credit card and online credit which Finance Act of 2022 to widen the tax sponsibility to deduct tax shall be on
expire may not attract new Tax De- base and to ensure that those who both the exchange and the broker.

16 | 2022 | JULY | BANKING FINANCE