CBDT Will soon issue a circular to various stakeholders, especially banks, to “clarify” the procedures on the applicability of the new ones. TDS Provisions in respect of profits or pre-requisites derived in any business or profession. CBDT Chairman Nitin Gupta said the board, which formulates policies for the income tax department, will issue an official explainer on the subject, including the “pressure” issue of one-time settlement (OTS) is being faced by the banks.

“We will clarify the position which will be helpful for the stakeholders. We will come out with a clear circular very soon,” he said during an interaction on Thursday.

Gupta said that all issues covered under Section 194R of the Income Tax Act will be addressed as part of the upcoming circular.

While the CBDT had in June issued a set of guidelines regarding the applicability of the newly introduced Section 194R in the Income Tax Act, the banking sector had specific concerns with regard to its businesses and operations.

The bank’s representatives had recently made a representation to the CBDT, seeking clarification on the framework and scope of Section 194R as they apprehension that the recently introduced provisions budget will force them to deduct 10 per cent tax at source on incentives given to business customers through credit cards and loans waived through one-time settlement or similar schemes.

Budget 2022-23 brought in a new section, 194R, in the IT Act, which requires tax deducted at source (TDS) at the rate of 10 per cent by any person who makes any profit in a year exceeding Rs 20,000 or provides benefits. resident, arising out of the business or profession of such resident.

The new provision has come into effect from July 1.