Insights · Direct Tax

Brief · Recent clarifications on Section 194R and 194S

Practical points from the latest CBDT clarifications on TDS on benefits, perquisites and virtual digital assets.

Published: 20 May 2026
Last reviewed: 25 July 2026
Law as at: 20 May 2026
Reading time: 3 min
Author: ATPM And Co
Technical reviewer: Partner, ATPM And Co

The clarifications narrow the scope of what constitutes a ‘benefit or perquisite’ under Section 194R in specified fact-patterns - a fresh review of channel-partner schemes is worth doing.

For Section 194S, exchange-mediated transactions continue to follow the exchange-withholding mechanism; peer-to-peer transactions place the withholding obligation on the buyer.

Robust vendor and counterparty documentation remains the best defence in any subsequent proceeding.

Official source

CBDT — Circulars

Disclaimer

This note is a general summary written for professional colleagues and clients of ATPM And Co. It reflects the position of law as at the date shown and is not a substitute for professional advice on the specific facts of any matter. Readers should consult the firm before acting on any point covered here.

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