Dishawaan Marketing Private Limited is a tax-compliant company and strictly adheres to the applicable laws of India. This document explains the tax implications applicable to Direct Sellers under Section 194R of the Income Tax Act, 1961.

The Finance Act, 2022 introduced Section 194R with effect from 01 July 2022, which mandates deduction of tax at source (TDS) on any benefit or perquisite provided to a resident, whether in cash or in kind.

1. Applicability of Section 194R

Under Section 194R, Dishawaan Marketing Private Limited is obligated to deduct TDS on benefits or perquisites provided to Direct Sellers, including but not limited to travel incentives, gifts, rewards, bonuses, and cash equivalents.

2. Cash in Lieu of Perquisite / Travel

• TDS shall be deducted at 10% where PAN is provided by the Direct Seller.
• TDS shall be deducted at 20% where PAN is not provided.
• The balance amount after TDS deduction shall be remitted directly to the bank account of the respective Direct Seller.
• TDS deducted shall be deposited with the Government Treasury.
• After filing the TDS return, the deducted tax shall be reflected in the Direct Seller’s Form 26AS (where PAN is available).

3. Perquisite / Travel Availed in Kind

• Direct Sellers opting for travel or benefits in kind must deposit an amount equivalent to 10% of the trip cost or gift value towards TDS under Section 194R.
• This TDS amount must be deposited into the designated bank account of the Company prior to availing the benefit.
• In case of multiple benefits (such as travel with spouse/family or multiple rewards), the entire cost and corresponding TDS shall be borne by the Direct Seller.
• Applicable tax rate shall be determined based on availability of PAN.
• TDS collected shall be deposited with the Government Treasury and reflected in Form 26AS after return filing.

4. Income Tax Return (ITR) Implications

The benefit amount along with tax deducted, as reflected in the Direct Seller’s Form 26AS, forms part of the total income and must be included while filing the Income Tax Return (ITR).

The Direct Seller shall be liable to pay income tax as per the applicable tax slab corresponding to his/her total income.

5. GST Implications

As per GST provisions, benefits received in cash or kind form part of taxable income. Direct Sellers registered under GST are required to issue a tax invoice for the value of benefits received.

The GST amount charged in such invoices shall be reimbursed to the Direct Seller as per the prevailing terms and conditions of the Company.

6. Compliance Responsibility

It is the responsibility of every Direct Seller to comply with Income Tax and GST laws, including correct disclosure of income and timely filing of returns. Dishawaan Marketing Private Limited shall not be responsible for any non-compliance by the Direct Seller.