Assignment - Taxation | Income Tax for assessment (Inter Level) PDF Download

P1 (Page 16.10) : Discuss the rate at which tax is deductible in the following cases.
1. X Ltd. pays Rs. 40,000 to Doordarshan.
2. RIL pays Rs. 2,00,000 to the Times of India on account of publication of its advertisement.
3. A publication company sponsors a seminar and pays Rs. 2,00,000 to a Firm.
4. An advertising company pays Rs. 30,000 to a photographer.
5. A garment manufacturing company pays Rs. 1,20,000 to an advertising company. It includes Rs. 65,000, being bill of media.
6. X, an individual (having only rental income), pays Rs. 40,000 to a contractor for carrying out routine repair work for business.
7. X Ltd. pays Rs. 30,001 to a contractor (individual) for carrying out routine repair work.
8. X Ltd. pays printing bill of Rs. 10,20,000 to an individual.
9. A department of the Government purchases goods and pays Rs. 70,000 to X Ltd.
10. A Government department pays Rs. 1.3 crore to a company for transporting certain documents to Calcutta.

Ans: (1) Nil (2) S 194C 2% (3) S 194C 2% (4) S 194J 10% but no TDS since amount is upto Rs. 30,000 (5) S 194C 2% of 80,000 (6) S 194C nil, since ind / HUF is not required to deduct tax at source (7) S 194C 1% of 30,001 (8) S 194C 1% of 10,20,000 (9) Nil, contract of sale (10) S 194C 2% of 1.3 crore.

P2 (Page 16.10) : Compute the amount of tax to be deducted at source in the following cases –
1. X Ltd. takes a building on rent and sub-lets it to Y, the sub-tenant, pays rent of Rs. 2,00,000.
2. X Ltd. takes a building on rent and sub-lets it to Y Ltd. Y Ltd. pays Rs. 2,00,000 as rent.
3. Z Ltd. takes a building on rent of Rs. 24,000 per month in the month of November. He pays current rent of Rs. 1,20,000 and advance rent of 1 month Rs. 24,000 = 1,44,000 during the current year.
4. B Ltd. takes a commercial building on rent of Rs. 5,00,000. Rent is payable to three co-owners as follows-
C (50% share): Rs. 2,50,000.
D Ltd. (40% share): Rs. 2,00,000.
E Ltd. (10% share): Rs. 50,000.
5. Assume in above question the building is taken on rent by B, an individual. B is a businessman but his books of account are not audited.
6. Interest of Rs. 2,300 paid by A Ltd. to Mr. X and Rs. 6,000 to his HUF and Rs. 1,000 to K Ltd by way of account payee cheque on account of debentures of the company held by them separately.
7. Payment of royalty to foreign company. Rate of TDS 10%. Payment Rs. 2 Crore. What is effective rate of TDS?
8. Payment of royalty to Indian company. Payment Rs. 2 Crore. What is effective rate of TDS?

Ans: (1) S 194I Nil, since ind is not required to deduct tax at source. (2) S 194I 10% of 2,00,000 = Rs. 20,000
(3) S 194I No TDS since amount of rent do not exceeds Rs. 1,80,000 (4) S 194I 10% of 4,50,000 = s. 45,000.
No TDS on payment made to E Ltd, since rent amount do not exceed Rs. 1,80,000. (5) No TDS since individual not required to get his accounts audited. (6) Payment to Mr. X No TDS since amount do not exceeds Rs. 5,000.
Payment to HUF TDS @ 10% on Rs. 6,000 = 600. Payment to K Ltd TDS @ 10% on Rs. 1,000 = 100. (7) 10.506% u/s 195. (8) 10% u/s 194J.