XYZ Pvt. Ltd. distributed Gold Coin to one of its Resident distributor for achieving higher sale. The coin was purchased on 15.01.2026 by XYZ Pvt.…

(i) As per section 194R, a person responsible for providing to a resident, any benefit or perquisite whether in cash or in kind, arising from business or the exercise of a profession, by such resident has to, before providing such benefit or perquisite, ensure that tax required to be deducted has been deposited @10% on the value of such benefit or perquisite, where the value of such benefit or perquisite exceeds - 20,000. Accordingly, in the present case, XYZ Pvt. Ltd. has to ensure that TDS of 25,000 i.e., 10% of 2,50,000 being the purchase price of the gold coin distributed to its resident distributor has been deposited by the distributor. For this purpose, XYZ Pvt Ltd. may rely on a declaration along with a copy of the tax payment challan provided by the recipient, being a distributor confirming that the tax required to be deducted on the benefit/perquisite has been deposited.