Taxation - Income TaxMCQQuestion 6109 of 146
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2023. The market value is ₹ 45,100. Determine the residential status of Mr. Madan and his HUF and compute gross total income of Mr. Madan for the assessment year 2024-25 assuming he opted out of the default tax regime. The value of one USD ($) may be taken as ₹ 70. (4 Marks)

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option A — (ia) though Mr. Amit has filed his return of income considering the professional fees from M/s PQR & Co. and paid taxes on the same. In such a case, M/s PQR & Co. would not be deemed as assessee in default by virtue of the first proviso to section 201(1) and the amount disallowed i.e., 27,150 would be allowed as deduction in A.Y. 2025-26. 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., 2.5.2024. Interest @1% on ₹ 3,050 (10% of ₹ 30,500) from June 2023 to May 2024 = ₹ 366 and on ₹ 6,000 (10% of ₹ 60,000) from January, 2024 to May 2024 = ₹ 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. 2022-23 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 i.e. on 1 since firm is required to get its books of accounts audited TAXATION ₹ 100 lakhs since turnover of M/s Fastest Ltd. exceeds ₹ 10 crores and TCS u/s 206C(1F) and TDS u/s 194Q is not applicable.

All Options:

  • A(ia) though Mr. Amit has filed his return of income considering the professional fees from M/s PQR & Co. and paid taxes on the same. In such a case, M/s PQR & Co. would not be deemed as assessee in default by virtue of the first proviso to section 201(1) and the amount disallowed i.e., 27,150 would be allowed as deduction in A.Y. 2025-26. 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., 2.5.2024. Interest @1% on ₹ 3,050 (10% of ₹ 30,500) from June 2023 to May 2024 = ₹ 366 and on ₹ 6,000 (10% of ₹ 60,000) from January, 2024 to May 2024 = ₹ 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. 2022-23 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 i.e. on 1 since firm is required to get its books of accounts audited TAXATION ₹ 100 lakhs since turnover of M/s Fastest Ltd. exceeds ₹ 10 crores and TCS u/s 206C(1F) and TDS u/s 194Q is not applicable. ✓
  • 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 1st June 2023 and 30th January 2024, respectively, assuming M/s PQR & Co. turnover/gross receipts exceeds the prescribed threshold limit1. However, M/s PQR & Co. has not deducted the tax at source during the P.Y. 2023-24, disallowance of ₹ 27,150, being 30% of ₹ 90,500 would be attracted u/s 40
  • C
  • D

Detailed Solution & Explanation

Correct Answer: Option **A** Explanation: As per the official suggested answer, option **A** is correct. Hence, **Option A** is the correct answer.

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