Income Tax Law (Group I) Model Test Paper - 8 (Answers) | Model Test Papers for CA Intermediate PDF Download

 Page 1


ANSWERS OF MODEL TEST PAPER 8 
INTERMEDIATE COURSE: GROUP-I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ 
No. 
Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (c)  3. (c) 
 (ii) (b)  4. (d) 
 (iii) (b)    
2. (i) (c)    
 (ii) (c)    
 (iii) (a)    
Division B – Descriptive Questions 
1. Computation of total income and tax liability of Mr. Raman for  
A.Y. 2025-26 under default tax regime 
 Particulars ` ` 
I Income from house property   
 Gross Annual Value of first floor (Rent 
received has been taken as gross annual value 
in the absence of other information) [` 35,000 
x 12] 
4,20,000  
 Less: Municipal taxes (paid by tenant,  
Mr. Aman, hence not deductible) 
Nil  
 Net Annual Value 4,20,000  
 Less: Deduction @30% of NAV 1,26,000  
   2,94,000 
II Profits and gains of business or profession   
 Net Profit 9,25,000  
 Add: Expenses debited to Profit and loss 
A/c but not allowable as deduction or to be 
considered under other heads of income 
  
 - Interest on delay in deposit of GST 
[Interest on delay in deposit in GST is 
compensatory in nature and hence, 
allowable as expenditure]  
Nil  
 - Fee for technical services to non-resident 
[100% disallowed under section 40(a)(i) 
since the TDS was not deducted] 
3,88,000  
544
Page 2


ANSWERS OF MODEL TEST PAPER 8 
INTERMEDIATE COURSE: GROUP-I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ 
No. 
Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (c)  3. (c) 
 (ii) (b)  4. (d) 
 (iii) (b)    
2. (i) (c)    
 (ii) (c)    
 (iii) (a)    
Division B – Descriptive Questions 
1. Computation of total income and tax liability of Mr. Raman for  
A.Y. 2025-26 under default tax regime 
 Particulars ` ` 
I Income from house property   
 Gross Annual Value of first floor (Rent 
received has been taken as gross annual value 
in the absence of other information) [` 35,000 
x 12] 
4,20,000  
 Less: Municipal taxes (paid by tenant,  
Mr. Aman, hence not deductible) 
Nil  
 Net Annual Value 4,20,000  
 Less: Deduction @30% of NAV 1,26,000  
   2,94,000 
II Profits and gains of business or profession   
 Net Profit 9,25,000  
 Add: Expenses debited to Profit and loss 
A/c but not allowable as deduction or to be 
considered under other heads of income 
  
 - Interest on delay in deposit of GST 
[Interest on delay in deposit in GST is 
compensatory in nature and hence, 
allowable as expenditure]  
Nil  
 - Fee for technical services to non-resident 
[100% disallowed under section 40(a)(i) 
since the TDS was not deducted] 
3,88,000  
544
 - Fire insurance premium [Fire insurance 
premium for ground floor which is occupied 
for business purpose is allowed since Mr. 
Raman is following mercantile system of 
accounting. Remaining half for let out 
portion is disallowed] [` 66,000/2]  
33,000  
 - Contribution to scientific research 
association approved u/s 35 [Not allowable 
under section 35(1)(ii) as per default tax 
regime] 
75,000  
 - Municipal taxes for ground floor [Allowable 
since the ground floor is occupied for 
business purpose] 
Nil  
 - Sum payable for purchase of raw material 
from M/s Paul Industries, a micro 
enterprise [Not allowable as per section 
43B(h) since payment was made to a micro 
enterprise on 5.4.2025 which is beyond the 
time limit specified u/s 15 of the MSMED 
Act, 2006 i.e., within 15 days from 
10.3.2025] 
49,000  
 - Sum payable for purchase of raw material 
from M/s Kal Industries, a small enterprise 
[Allowable as per section 43B(h) since 
payment was made to a small enterprise 
on 5.4.2025 i.e., within 15 days from 
31.3.2025.  
Nil  
 However, since the payment is made in 
cash on 5.4.2025, ` 1,34,000 for purchase 
of raw material would be the deemed 
income of P.Y. 2025-26 as per section 
40A(3A)]  
  
  14,70,000  
 Less: Incomes credited to profit and loss 
account but not taxable as business 
income  
  
 - Rent received for let out portion 4,20,000  
 - Gain on sale of land 4,00,000  
  6,50,000  
 Less: Depreciation    
 - On trademark [` 2,00,000 x 25% x 
50%, since trademark is put to use for 
less than 180 days] 
25,000  
 - On Car [` 5,40,000 x 15%] 81,000  
545
Page 3


ANSWERS OF MODEL TEST PAPER 8 
INTERMEDIATE COURSE: GROUP-I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ 
No. 
Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (c)  3. (c) 
 (ii) (b)  4. (d) 
 (iii) (b)    
2. (i) (c)    
 (ii) (c)    
 (iii) (a)    
Division B – Descriptive Questions 
1. Computation of total income and tax liability of Mr. Raman for  
A.Y. 2025-26 under default tax regime 
 Particulars ` ` 
I Income from house property   
 Gross Annual Value of first floor (Rent 
received has been taken as gross annual value 
in the absence of other information) [` 35,000 
x 12] 
4,20,000  
 Less: Municipal taxes (paid by tenant,  
Mr. Aman, hence not deductible) 
Nil  
 Net Annual Value 4,20,000  
 Less: Deduction @30% of NAV 1,26,000  
   2,94,000 
II Profits and gains of business or profession   
 Net Profit 9,25,000  
 Add: Expenses debited to Profit and loss 
A/c but not allowable as deduction or to be 
considered under other heads of income 
  
 - Interest on delay in deposit of GST 
[Interest on delay in deposit in GST is 
compensatory in nature and hence, 
allowable as expenditure]  
Nil  
 - Fee for technical services to non-resident 
[100% disallowed under section 40(a)(i) 
since the TDS was not deducted] 
3,88,000  
544
 - Fire insurance premium [Fire insurance 
premium for ground floor which is occupied 
for business purpose is allowed since Mr. 
Raman is following mercantile system of 
accounting. Remaining half for let out 
portion is disallowed] [` 66,000/2]  
33,000  
 - Contribution to scientific research 
association approved u/s 35 [Not allowable 
under section 35(1)(ii) as per default tax 
regime] 
75,000  
 - Municipal taxes for ground floor [Allowable 
since the ground floor is occupied for 
business purpose] 
Nil  
 - Sum payable for purchase of raw material 
from M/s Paul Industries, a micro 
enterprise [Not allowable as per section 
43B(h) since payment was made to a micro 
enterprise on 5.4.2025 which is beyond the 
time limit specified u/s 15 of the MSMED 
Act, 2006 i.e., within 15 days from 
10.3.2025] 
49,000  
 - Sum payable for purchase of raw material 
from M/s Kal Industries, a small enterprise 
[Allowable as per section 43B(h) since 
payment was made to a small enterprise 
on 5.4.2025 i.e., within 15 days from 
31.3.2025.  
Nil  
 However, since the payment is made in 
cash on 5.4.2025, ` 1,34,000 for purchase 
of raw material would be the deemed 
income of P.Y. 2025-26 as per section 
40A(3A)]  
  
  14,70,000  
 Less: Incomes credited to profit and loss 
account but not taxable as business 
income  
  
 - Rent received for let out portion 4,20,000  
 - Gain on sale of land 4,00,000  
  6,50,000  
 Less: Depreciation    
 - On trademark [` 2,00,000 x 25% x 
50%, since trademark is put to use for 
less than 180 days] 
25,000  
 - On Car [` 5,40,000 x 15%] 81,000  
545
 
 - On new Plant & machinery  
[` 2,50,000 x 15%] 
37,500  
 - On Building [` 8,00,000 x 10%] 80,000  
 Additional depreciation   
 - On new Plant & machinery [Not 
allowable under default tax regime] 
Nil  
 Income from Business   4,26,500 
III Capital Gains   
 Full value of consideration 44,00,000  
 Less: Cost of acquisition 40,00,000  
 Short term capital gains on land [Since land is 
held for less than 24 months] 
 4,00,000 
 Gross Total Income  11,20,500 
 Less: Deduction under Chapter VI-A [Not 
allowable under default tax regime] 
 Nil 
 Total Income  11,20,500 
 Tax Liability   
 Up to ` 3,00,000 Nil  
 From ` 3,00,001 to ` 7,00,000 @5%  20,000  
 From ` 7,00,001 to ` 10,00,000 @10%   30,000  
 From ` 10,00,001 to ` 11,20,500 @15%  18,075  
   68,075 
 Add: Health and education cess @4%      2,723 
 Tax Liability  70,798 
 Tax Liability (Rounded off)  70,800 
Computation of total income and tax liability of Mr. Raman for  
A.Y. 2025-26 under normal provisions of the Act 
 Particulars ` ` 
 Gross Total Income as per default tax 
regime 
 11,20,500 
 Less: Additional depreciation on new Plant & 
machinery [` 2,50,000 x 20%] 
 50,000 
 Less: Contribution to scientific research 
association approved u/s 35 
 75,000 
 Gross Total Income as per normal 
provisions of the Act 
 9,95,500 
  
 
 
  
546
Page 4


ANSWERS OF MODEL TEST PAPER 8 
INTERMEDIATE COURSE: GROUP-I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ 
No. 
Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (c)  3. (c) 
 (ii) (b)  4. (d) 
 (iii) (b)    
2. (i) (c)    
 (ii) (c)    
 (iii) (a)    
Division B – Descriptive Questions 
1. Computation of total income and tax liability of Mr. Raman for  
A.Y. 2025-26 under default tax regime 
 Particulars ` ` 
I Income from house property   
 Gross Annual Value of first floor (Rent 
received has been taken as gross annual value 
in the absence of other information) [` 35,000 
x 12] 
4,20,000  
 Less: Municipal taxes (paid by tenant,  
Mr. Aman, hence not deductible) 
Nil  
 Net Annual Value 4,20,000  
 Less: Deduction @30% of NAV 1,26,000  
   2,94,000 
II Profits and gains of business or profession   
 Net Profit 9,25,000  
 Add: Expenses debited to Profit and loss 
A/c but not allowable as deduction or to be 
considered under other heads of income 
  
 - Interest on delay in deposit of GST 
[Interest on delay in deposit in GST is 
compensatory in nature and hence, 
allowable as expenditure]  
Nil  
 - Fee for technical services to non-resident 
[100% disallowed under section 40(a)(i) 
since the TDS was not deducted] 
3,88,000  
544
 - Fire insurance premium [Fire insurance 
premium for ground floor which is occupied 
for business purpose is allowed since Mr. 
Raman is following mercantile system of 
accounting. Remaining half for let out 
portion is disallowed] [` 66,000/2]  
33,000  
 - Contribution to scientific research 
association approved u/s 35 [Not allowable 
under section 35(1)(ii) as per default tax 
regime] 
75,000  
 - Municipal taxes for ground floor [Allowable 
since the ground floor is occupied for 
business purpose] 
Nil  
 - Sum payable for purchase of raw material 
from M/s Paul Industries, a micro 
enterprise [Not allowable as per section 
43B(h) since payment was made to a micro 
enterprise on 5.4.2025 which is beyond the 
time limit specified u/s 15 of the MSMED 
Act, 2006 i.e., within 15 days from 
10.3.2025] 
49,000  
 - Sum payable for purchase of raw material 
from M/s Kal Industries, a small enterprise 
[Allowable as per section 43B(h) since 
payment was made to a small enterprise 
on 5.4.2025 i.e., within 15 days from 
31.3.2025.  
Nil  
 However, since the payment is made in 
cash on 5.4.2025, ` 1,34,000 for purchase 
of raw material would be the deemed 
income of P.Y. 2025-26 as per section 
40A(3A)]  
  
  14,70,000  
 Less: Incomes credited to profit and loss 
account but not taxable as business 
income  
  
 - Rent received for let out portion 4,20,000  
 - Gain on sale of land 4,00,000  
  6,50,000  
 Less: Depreciation    
 - On trademark [` 2,00,000 x 25% x 
50%, since trademark is put to use for 
less than 180 days] 
25,000  
 - On Car [` 5,40,000 x 15%] 81,000  
545
 
 - On new Plant & machinery  
[` 2,50,000 x 15%] 
37,500  
 - On Building [` 8,00,000 x 10%] 80,000  
 Additional depreciation   
 - On new Plant & machinery [Not 
allowable under default tax regime] 
Nil  
 Income from Business   4,26,500 
III Capital Gains   
 Full value of consideration 44,00,000  
 Less: Cost of acquisition 40,00,000  
 Short term capital gains on land [Since land is 
held for less than 24 months] 
 4,00,000 
 Gross Total Income  11,20,500 
 Less: Deduction under Chapter VI-A [Not 
allowable under default tax regime] 
 Nil 
 Total Income  11,20,500 
 Tax Liability   
 Up to ` 3,00,000 Nil  
 From ` 3,00,001 to ` 7,00,000 @5%  20,000  
 From ` 7,00,001 to ` 10,00,000 @10%   30,000  
 From ` 10,00,001 to ` 11,20,500 @15%  18,075  
   68,075 
 Add: Health and education cess @4%      2,723 
 Tax Liability  70,798 
 Tax Liability (Rounded off)  70,800 
Computation of total income and tax liability of Mr. Raman for  
A.Y. 2025-26 under normal provisions of the Act 
 Particulars ` ` 
 Gross Total Income as per default tax 
regime 
 11,20,500 
 Less: Additional depreciation on new Plant & 
machinery [` 2,50,000 x 20%] 
 50,000 
 Less: Contribution to scientific research 
association approved u/s 35 
 75,000 
 Gross Total Income as per normal 
provisions of the Act 
 9,95,500 
  
 
 
  
546
Less: Deduction under Chapter VI-A 
 Deduction under section 80C    
 Tuition fees to a college for daughter’s 
education  
25,000  
 Deduction under section 80D   
 Preventive health check-up for self and parents 
restricted to 
5,000  
 Deduction under section 80GGC   
 Donation to a registered political party since the 
payment is made otherwise than by cash 
20,000  
   50,000 
 Total Income as per normal provisions of 
the Act 
 9,45,500 
 Tax Liability   
 Up to ` 3,00,000 Nil  
 From ` 3,00,001 to ` 5,00,000 @5%  10,000  
 From ` 5,00,001 to ` 9,45,500 @20%   89,100  
   99,100 
 Add: Health and education cess @4%      3,964 
 Tax Liability  1,03,064 
 Tax Liability (Rounded off)  1,03,060 
2. (a) Residential Status of Mr. Madan  
 Mr. Madan, an Indian citizen who left India on 1
st
 September 2024 for 
the purpose of employment to USA, would be non-resident in India, since 
he stayed in India for 169 days (30+31+30+31+31+1+15) only during the  
P.Y. 2024-25 which is less than 182 days. 
 Residential Status of HUF 
 Since Mr. Madan is managing the HUF for part of the year from India, 
control and management of its affairs is situated partly in India.  
 Hence, the HUF would be resident in India for the P.Y. 2024-25. 
 A HUF is said to be “Resident and ordinarily resident” in India during the 
previous year 2024-25, if Karta (Mr. Madan, in this case) satisfies both 
the following conditions: 
-  He is a resident in at least 2 out of 10 previous years preceding the 
relevant previous year; and 
-  His stay in India in the last 7 years preceding the relevant previous 
year is 730 days or more. 
 Mr. Madan has satisfied both the above conditions as he had never gone 
out of India except for 99 days and 201 days in the P.Y. 2023-24 and  
P.Y. 2022-23, respectively, the HUF would be ROR in India. 
547
Page 5


ANSWERS OF MODEL TEST PAPER 8 
INTERMEDIATE COURSE: GROUP-I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ 
No. 
Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (c)  3. (c) 
 (ii) (b)  4. (d) 
 (iii) (b)    
2. (i) (c)    
 (ii) (c)    
 (iii) (a)    
Division B – Descriptive Questions 
1. Computation of total income and tax liability of Mr. Raman for  
A.Y. 2025-26 under default tax regime 
 Particulars ` ` 
I Income from house property   
 Gross Annual Value of first floor (Rent 
received has been taken as gross annual value 
in the absence of other information) [` 35,000 
x 12] 
4,20,000  
 Less: Municipal taxes (paid by tenant,  
Mr. Aman, hence not deductible) 
Nil  
 Net Annual Value 4,20,000  
 Less: Deduction @30% of NAV 1,26,000  
   2,94,000 
II Profits and gains of business or profession   
 Net Profit 9,25,000  
 Add: Expenses debited to Profit and loss 
A/c but not allowable as deduction or to be 
considered under other heads of income 
  
 - Interest on delay in deposit of GST 
[Interest on delay in deposit in GST is 
compensatory in nature and hence, 
allowable as expenditure]  
Nil  
 - Fee for technical services to non-resident 
[100% disallowed under section 40(a)(i) 
since the TDS was not deducted] 
3,88,000  
544
 - Fire insurance premium [Fire insurance 
premium for ground floor which is occupied 
for business purpose is allowed since Mr. 
Raman is following mercantile system of 
accounting. Remaining half for let out 
portion is disallowed] [` 66,000/2]  
33,000  
 - Contribution to scientific research 
association approved u/s 35 [Not allowable 
under section 35(1)(ii) as per default tax 
regime] 
75,000  
 - Municipal taxes for ground floor [Allowable 
since the ground floor is occupied for 
business purpose] 
Nil  
 - Sum payable for purchase of raw material 
from M/s Paul Industries, a micro 
enterprise [Not allowable as per section 
43B(h) since payment was made to a micro 
enterprise on 5.4.2025 which is beyond the 
time limit specified u/s 15 of the MSMED 
Act, 2006 i.e., within 15 days from 
10.3.2025] 
49,000  
 - Sum payable for purchase of raw material 
from M/s Kal Industries, a small enterprise 
[Allowable as per section 43B(h) since 
payment was made to a small enterprise 
on 5.4.2025 i.e., within 15 days from 
31.3.2025.  
Nil  
 However, since the payment is made in 
cash on 5.4.2025, ` 1,34,000 for purchase 
of raw material would be the deemed 
income of P.Y. 2025-26 as per section 
40A(3A)]  
  
  14,70,000  
 Less: Incomes credited to profit and loss 
account but not taxable as business 
income  
  
 - Rent received for let out portion 4,20,000  
 - Gain on sale of land 4,00,000  
  6,50,000  
 Less: Depreciation    
 - On trademark [` 2,00,000 x 25% x 
50%, since trademark is put to use for 
less than 180 days] 
25,000  
 - On Car [` 5,40,000 x 15%] 81,000  
545
 
 - On new Plant & machinery  
[` 2,50,000 x 15%] 
37,500  
 - On Building [` 8,00,000 x 10%] 80,000  
 Additional depreciation   
 - On new Plant & machinery [Not 
allowable under default tax regime] 
Nil  
 Income from Business   4,26,500 
III Capital Gains   
 Full value of consideration 44,00,000  
 Less: Cost of acquisition 40,00,000  
 Short term capital gains on land [Since land is 
held for less than 24 months] 
 4,00,000 
 Gross Total Income  11,20,500 
 Less: Deduction under Chapter VI-A [Not 
allowable under default tax regime] 
 Nil 
 Total Income  11,20,500 
 Tax Liability   
 Up to ` 3,00,000 Nil  
 From ` 3,00,001 to ` 7,00,000 @5%  20,000  
 From ` 7,00,001 to ` 10,00,000 @10%   30,000  
 From ` 10,00,001 to ` 11,20,500 @15%  18,075  
   68,075 
 Add: Health and education cess @4%      2,723 
 Tax Liability  70,798 
 Tax Liability (Rounded off)  70,800 
Computation of total income and tax liability of Mr. Raman for  
A.Y. 2025-26 under normal provisions of the Act 
 Particulars ` ` 
 Gross Total Income as per default tax 
regime 
 11,20,500 
 Less: Additional depreciation on new Plant & 
machinery [` 2,50,000 x 20%] 
 50,000 
 Less: Contribution to scientific research 
association approved u/s 35 
 75,000 
 Gross Total Income as per normal 
provisions of the Act 
 9,95,500 
  
 
 
  
546
Less: Deduction under Chapter VI-A 
 Deduction under section 80C    
 Tuition fees to a college for daughter’s 
education  
25,000  
 Deduction under section 80D   
 Preventive health check-up for self and parents 
restricted to 
5,000  
 Deduction under section 80GGC   
 Donation to a registered political party since the 
payment is made otherwise than by cash 
20,000  
   50,000 
 Total Income as per normal provisions of 
the Act 
 9,45,500 
 Tax Liability   
 Up to ` 3,00,000 Nil  
 From ` 3,00,001 to ` 5,00,000 @5%  10,000  
 From ` 5,00,001 to ` 9,45,500 @20%   89,100  
   99,100 
 Add: Health and education cess @4%      3,964 
 Tax Liability  1,03,064 
 Tax Liability (Rounded off)  1,03,060 
2. (a) Residential Status of Mr. Madan  
 Mr. Madan, an Indian citizen who left India on 1
st
 September 2024 for 
the purpose of employment to USA, would be non-resident in India, since 
he stayed in India for 169 days (30+31+30+31+31+1+15) only during the  
P.Y. 2024-25 which is less than 182 days. 
 Residential Status of HUF 
 Since Mr. Madan is managing the HUF for part of the year from India, 
control and management of its affairs is situated partly in India.  
 Hence, the HUF would be resident in India for the P.Y. 2024-25. 
 A HUF is said to be “Resident and ordinarily resident” in India during the 
previous year 2024-25, if Karta (Mr. Madan, in this case) satisfies both 
the following conditions: 
-  He is a resident in at least 2 out of 10 previous years preceding the 
relevant previous year; and 
-  His stay in India in the last 7 years preceding the relevant previous 
year is 730 days or more. 
 Mr. Madan has satisfied both the above conditions as he had never gone 
out of India except for 99 days and 201 days in the P.Y. 2023-24 and  
P.Y. 2022-23, respectively, the HUF would be ROR in India. 
547
 
Computation of Gross Total Income of Mr. Madan  
for the A.Y. 2025-26 
 Amount 
in ` 
Income under the head “Salaries”  
Salary earned in India: [` 65,500 x 5 + ` 65,500 x15/31]  3,59,194 
Salary paid in USA: [Not taxable as Mr. Madan is a non-
resident and such income does not accrue or arise or 
received in India] 
Nil  
Less: Standard Deduction     50,000 
 3,09,194 
Income from other sources  
Difference between the consideration of ` 18 lakhs and 
stamp duty value of ` 23 lakhs of the residential 
property acquired [Taxable, since the difference of ` 5 
lakhs exceed ` 1,80,000, being the higher of 10% of the 
consideration and ` 50,000] 
5,00,000 
Sculpture received as gift from Rajeev, his friend in 
India [Not taxable as the value does not exceed  
` 50,000] 
Nil  
Gross Total Income  8,09,914 
 (b) (i) M/s PQR & Co. is required to deduct tax at source under section 
194J @10% on the professional fees paid to Mr. Amit of ` 30,500 
and ` 60,000 on 1
st
 June 2024 and 30
th
 January 2025, respectively, 
since M/s PQR & Co. turnover/gross receipts exceeds the 
prescribed threshold limit of ` 1 crore during the P.Y. 2023-24. 
 For non-deduction of tax at source, interest @1% would be leviable 
under section 201(1A)(i) for every month or part of the month on 
the amount of tax from the date on which such tax was deductible 
to the date such tax was paid by the payee i.e., 2.5.2025.  
 Interest @1% on ` 3,050 (10% of ` 30,500) from June 2024 to May 
2025 = ` 366 and on ` 6,000 (10% of ` 60,000) from January, 2025 
to May 2025 = ` 300 is payable by M/s PQR & Co. 
(ii) M/s. Fastest Ltd. is not required to collect tax at source u/s 
206C(1F) on sale of cars of ` 150 lakhs to M/s. Race LLP, since 
such sale is to a distributor and sale price of each car does not 
exceed ` 10 lakhs.   
 M/s. Race LLP is also not required to deduct tax at source u/s 
194Q, since its turnover, being a buyer in the P.Y. 2023-24 does 
not exceed ` 10 crores.  
 However, M/s Fastest Ltd. is required to collect tax at source u/s 
206C(1H) @0.1% on the sale consideration exceeding ` 50 lakhs 
548