Q. 194 R Tax Implication

Question

As per the question no 8 of the Circular no 8, Expenditure pertaining to business conference ,would not be considered as business /perquisite for the purposes of tax deduction under section 194R of the Act. provided Conference is for the purpose of

I.new product being launched

II.discussion as to how the product is better than others

III.obtaining orders from dealers/customers

IV.teaching sales techniques to dealers/customers

V.addressing queries of the dealers/customers

VI.reconciliation of accounts with dealers/customers

Circular say expenditure pertaining to conference - will  expenditure on  souvenir/Gift  given to dealer during the conference will be considered as perquisite provided conference is for new product launch.

will this exclusion from purview of 194R is limited to air travel,hotel stay.

Answer 1

It would cover only the conference expenses and the sooner or gift given could be covered under section 194R.