MCQs-on-TDS-TCS-Advance-Tax- -Intt.-Tax PDF

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MCQs on TDS

“MCQs on TDS” (1)

In the P.Y. 2019-20, a HUF has paid salary of ` 50,000 per month to its Marketing Manager. The HUF was not liable for tax audit in the A.Y. 2019-20. Determine whether there was any liability to deduct any TDS in the P.Y. 2019-20 and if yes, what is appropriate section; (i)

Not liable to deduct TDS, as it was not subject to tax audit in immediately preceding A.Y.

(ii)

Liable to deduct TDS u/s 194H

(iii) Liable to deduct TDS u/s 194J (iv) Liable to deduct TDS u/s 192 (2)

[2 Marks]

Mr. A is salaried employee who is working in a multinational company. Mr. A has taken a residential accommodation on rent from Mr. B, who is non-resident in India. During P.Y. 201819 relevant to A.Y. 2019-20, Mr. A has paid monthly rent of INR 75,000 per month to Mr. B. Mr. A is not having any income other than salary income. Determine, whether Mr. A is under obligation to deduct TDS as per the provisions of Income-tax Act, 1961 and if yes, under which section and at what rate; (i)

Not liable to deduct TDS as Mr. A is individual not subject to tax audit in the immediately preceding AY, hence, no rate applicable.

(ii)

Liable to deduct tax u/s 194-I @ 10%

(iii) Liable to deduct tax u/s 194-IB @ 5% (iv) Liable to deduct tax u/s 195 @ 31.20% (3)

[2 Marks]

ABC (P) Ltd. has deducted tax of a foreign company u/s 195 read with 115A of the income-tax Act in the month of December 2018. (A) What would be the due date of deposit of tax deducted by ABC (P) Ltd.; (B) Under which form, the return of TDS would be filed…… (i)

(a) 07th of the following month i.e., 07th January, 2019; (b) Form 27Q

(ii)

(a) 15th of the following month i.e., 15th January, 2019; (b) Form 24Q

(iii) (a) 31st of the following month i.e., 31st January, 2019; (b) Form 26Q (iv) (a) None of above; (b) Form 26QB (4)

[2 Marks]

A firm pays salary and interest on capital to its resident partners. The salary and interest paid fall within the limits specified in section 40(b). Which of the following statements is true? (i)

Tax has to be deducted u/s 192 on salary and u/s 194A on interest.

(ii)

Tax has to be deducted u/s 192 on salary but no tax need to be deducted on interest.

(iii) No tax need to be deducted on salary but tax has to be deducted u/s 194A on interest. (iv) No tax need to be deducted at source on either salary or interest.

[1 Mark] 1

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(5)

MCQs on TDS

While conducting the tax audit of the assessee, M/s PQR Private Limited, you have observed that a payment is made towards installation of machinery by a company in its factory to a vendor, Mr. Raj amounting to ` 45,000 and the company has not deducted any withholding tax on such payment. Determine the applicable section and the rate of TDS. (i)

U/s 194J @10%

(ii)

U/s 194C @2%

(iii) U/s 194C @1% (iv) No TDS is applicable on said payment (6)

[1 Mark]

Ms. Q, a non-resident in India and aged 60 years, has income from house property in India. Such income is received by her in her country of residence i.e., in USA. Determine whether such income is taxable and if yes, the maximum amount of income not chargeable to tax in case of Ms Q? (i)

Not chargeable to tax as income is not received in India

(ii)

Chargeable to tax and basic exemption limit is not available to non-resident

(iii) Chargeable to tax and the maximum amount not chargeable to tax is ` 2,50,000 (iv) Chargeable to tax and the maximum amount not chargeable to tax is ` 3,00,000 [1 Mark] (7)

Come Air Ltd. has paid amount of ` 20 Lakhs during the year ended 31.03.2019 to Airports Authority of India towards landing and parking charges. (i)

No tax is deductible at source from such payment

(ii)

Tax is deductible at source@2% u/s 194C on such payment

(iii) Tax is deductible at source@2% u/s 194-I on such payment (iv) Tax is deductible at source@10% u/s 194-I on such payment (8)

[2 Marks]

A Ltd. credited ` 28,000 towards fees for professional services and ` 27,000 towards fees for technical services to the account of Ram in its books of account on 12.11.2018. The total sum of ` 55,000 was paid by cheque to Ram on the same date. (i)

Tax is deductible at source@10% u/s 194J on the entire payment of ` 55,000

(ii)

Tax is deductible at source@10% u/s 194J on ` 25,000 (` ` 55,000 – ` 30,000)

(iii) Tax is deductible at source@2% u/s 194-J on ` 25,000 (` ` 55,000 – ` 30,000) (iv) No tax is deductible at source from such payment (9)

[2 Marks]

Mr. H, a salaried individual, pays rent of ` 55,000 per month to Mr. R form June, 2018. Which of the following statement is correct? (i)

No tax is required to be deducted for F.Y. 2018-19 since Mr. H is not subject to tax audit u/s 44AB. 2

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(ii)

MCQs on TDS

Mr. H has to deduct tax@5% from rent paid every month.

(iii) Mr. H has to deduct tax@5% on the entire rent paid for F.Y. 2018-19 from the rent payable for March, 2019. (iv) Mr. H has to deduct tax of ` 55,000 from rent payable for March, 2019. [2 Marks] (10) PQR Ltd. took on sub-lease a building from Ms. Ruchi with effect from 1.7.2018 on a rent of ` 20,000 per month. It also took on hire machinery from Ms. Ruchi with effect from 1.10.2018 on hire charges of ` 15,000 per month. PQR Ltd. entered into two separate agreement with Ms. Ruchi for sub-lease of building and hiring of machinery. Which of the following statements are correct with reference to PQR Ltd.’s liability to deduct tax at source, assuming that one-month’s rent was received as security deposit, which is refundable at the end of the lease period? (i)

No tax needs to be deducted at source since rent for building does not exceed ` 1,80,000 p.a. and rent for machinery also does not exceed ` 1,80,000 p.a. Security deposit refundable at the end of the lease term is not rent for the purpose of TDS.

(ii)

Tax has to be deducted@10% on rent of ` 2,00,000 (including security deposit) for building, but no tax needs to be deducted on rent for machinery (including security deposit), since the same does not exceed ` 1,80,000.

(iii) Tax has to be deducted@10% on ` 1,80,000 and 2% on ` 1,05,000 (i.e. rent including security deposit) (iv) Tax has to be deducted@10% on ` 1,80,000 and @2% on ` 90,000. Security deposit refundable at the end of the lease period is not rent. [2 Marks] (11) Rosy Add Ltd., an advertising company, has retained a sum of ` 15 Lakhs, towards charges for procuring and canvassing advertisement, from payment of ` 1 crore due to Cloud TV, a television channel, and remitted the balance amount of ` 85 Lakhs to the television channel. Which of the following statements are correct? (i)

No TDS is attracted on the sum of ` 15 Lakhs retained by Rosy Add Ltd.

(ii)

TDS@2% is attracted on the sum of ` 15 Lakhs retained by Rosy Add Ltd.

(iii) TDS@5% is attracted on the sum of ` 15 Lakhs retained by Rosy Add Ltd. (iv) TDS@10% is attracted on the sum of ` 15 Lakhs retained by Rosy Add Ltd. [2 Marks] (12) Mr. X acquired a house property at Mumbai from Mr. Y resident, for a consideration of ` 90 Lakhs, on 20.06.2018. On the same day, Mr. X made two separate transactions, thereby acquiring an urban plot in Kolkata from Mr. C for a sum of ` 49,50,000 and rural agricultural land Mr. D for a consideration of ` 60 Lakhs. Which of the following statements are correct? (i)

No tax deduction at source is required in respect of any of the three payments.

(ii)

TDS@1% is attracted on all the three payments. 3

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MCQs on TDS

(iii) TDS@1% on ` 90 Lakhs and ` 49,50,000 are attracted. No TDS on payment of ` 60,00,000 for acquisition of rural agricultural land (iv) TDS@1% on ` 90 Lakhs is attracted. No TDS on payments of ` 49,50,000 and ` 60,00,000. [2 Marks] (13) A notified infrastructure debt fund eligible for exemption under section 10(47) of the Income-tax Act, 1961 pays interest of ` 5 Lakhs to a company incorporated in a foreign country. The foreign company incurred expenditure of ` 12,000 for earning such interest. The fund also pays interest of ` 3 Lakhs to Mr. Frank, who is a resident of Country A, a notified jurisdictional area. Which of the following statements are correct? (i)

No tax deduction at source is required in respect of both the payments.

(ii)

No TDS is required in respect of payment of ` 5 Lakhs to the foreign company. However payment of interest to Frank attracts [email protected]%

(iii) [email protected]% is attracted on ` 4,88,000 to the foreign company. [email protected]% is attracted on interest payment of ` 3 Lakhs to Mr. Frank (iv) [email protected]% is attracted on interest payment of ` 5 Lakhs to the foreign company. [email protected]% is attracted on interest payment of ` 3 Lakhs to Mr. Frank [2 Marks] (14) ` 2 Lakh is paid to Mr. Vallish, a resident individual on 15.3.2019 by the State of Haryana on compulsory acquisition of his urban agricultural land. (i)

No tax is deductible at source

(ii)

Tax is deductible@ 1%

(iii) Tax is deductible@ 5% (iv) Tax is deductible@ 10%

[1 Mark]

(15) M/s Manan & Sons paid ` 35,000 to Mr. Ashu on 01.05.2018 towards fee for legal advisory services without deduction of tax at source. Another payment of ` 47,000 was due to Mr. Ashu on 31.07.2018 and TDS on entire amount (i.e. ` 35,000 plus ` 47,000) was deducted and then the net amount was paid. However, the total tax deducted was deposited on 15.11.2018. The interest chargeable under section 201(1A) will be: (i)

` 650

(ii)

` 433

(iii) ` 486 (iv) ` 597

[2 Marks]

(16) XYZ Ltd. has taken office premises on lease from Mr. A. The monthly rental amounts to ` 15,000 on which GST is levied @ 18.5% thereby resulting in a total monthly expense of ` 17,775. TDS u/s 194-l on this transaction is applicable on: (i)

` 15,000 4

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(ii)

MCQs on TDS

` 17,780

(iii) ` 17,775 (iv) Nil

[1 Mark]

(17) P Ltd. has to make a payment of ` 10,00,000 to Mr. Prem for certain services. P Ltd. is required to deduct tax at source at the rate of 10%. However, Mr. Prem does not provide Permanent Account Number (PAN) to P Ltd. for deduction of tax from ` 10,00,000. The rate at which tax will be deducted by P Ltd. will be: (i)

10%

(ii)

20%

(iii) 30% (iv) No TDS should be deducted due to non- availability of PAN

[1 Mark]

(18) A person responsible for paying any sum to any resident individual contractor for carrying out any work is liable to deduct tax at source under section 194C of Income tax Act @: _________ (i)

1%

(ii)

2%

(iii) 5% (iv) Nil

[1 Mark]

(19) Tax deduction at source under section 194-IA would apply where the consideration for the acquisition of specified immovable property exceeds: (i)

` 30 Lakhs

(ii)

` 5 Lakhs

(iii) ` 25 Lakhs (iv) ` 50 Lakhs

[1 Mark]

(20) When the quarterly statement of TDS is filed belatedly, the fee for default in furnishing the statement shall be_________ per day: (i)

`100

(ii)

`200

(iii) `500 (iv) `1,000

[1 Mark]

(21) In case of individual or HUF, to determine whether certain TDS provisions are attracted, what has to be seen is whether the person is subject to tax audit under section 44AB in: (i)

The immediately preceding financial year

(ii)

Current year 5

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MCQs on TDS

(iii) Last two continuous financial years (iv) None of the above

[1 mark]

(22) No Tax is deductible if the amount of rent credited or paid during the financial year does not exceed rupees……………...u/s 194-l of the Income tax Act 1961 would be : (i)

` 1,80,000

(ii)

` 1,20,000

(iii) ` 2,50,000 (iv) ` 6,00,000

[1 Mark]

(23) Rate of TDS on winnings from lotteries in case of a foreign company, if there is no other income is : (i)

30%

(ii)

40%

(iii) 30% plus cess (iv) 40% plus cess

[1 Mark]

(24) Ms. Rinky resigned from employment from Jiwaji University after serving for 4 years and 8 month. She received 1,40,000 from recognized provident fund. The amount of tax deductible at source under section 192A would be : (i)

@20 being 28,000

(ii)

@30% being 42,000

(iii) @10% being 14,000 (iv) Nil.

[1 Mark]

(25) As per section 271H, where a person fails to file the statement of tax deducted/collected at source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then he shall be liable to pay penalty under section 271H. Maximum penalty that can be levied is ___________ : (i)

` 1,00,000, but not exceeding the amount of TDS/TCS

(ii)

` 2,00,000

(iii) ` 3,00,000 (iv) ` 5,00,000

[1 Mark]

(26) Section 194B of the income Tax Act, 1961 provides that, any person responsible for paying to any person any income by way of winning from lottery, or crossword puzzle or card game and other game of any sort shall be liable to deduct tax at source, at the time of ________________ of such income @ 30 : (i)

Credit 6

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(ii)

MCQs on TDS

Payment

(iii) Credit or payment whichever is earlier (iv) 31st march

[1 Mark]

(27) Under section 194LA of the Income tax Act, 1961, any person responsible for paying to a resident any sum exceeding ` 2 lakhs towards compensation for compulsory acquisition of the seller’s urban industrial land under any law, has to deduct income-tax at the rate of _________ : (i)

10%

(ii)

15%

(iii) 20% (iv) Nil

[1 Mark]

(28) Mr. A, resident, has purchased a property worth ` 80 lakhs situated at Denmark from co-owner Mr. B and Mr. C, who are also residents of India. Mr. A has approached you to guide him regarding the deduction of tax at source from amount of ` 20 lakhs and ` 60 lakhs payable to Mr. B and Mr. C, respectively. Advise him : (i)

Tax at source shall be deducted u/s 195 from the amount of ` 80 lakhs

(ii)

Tax at source shall be deducted u/s 194-IA from the amount of ` 80 lakhs

(iii) No tax is required to be deducted at source (iv) Tax at source shall be deducted u/s 194-IA from the amount of ` 60 lakhs payable to Mr. C [2 Marks] (29) When Mr. Ganesh doing business paid hall rent of ` 80,000 for 3 days for doing Diwali sale, the amount of tax deductible at source under section 194-IB would be: (i)

` 8,000 @ 10%

(ii)

` 16,000 @ 20%

(iii) ` 4,000 @ 5% (iv) Nil

[1 Mark]

(30) Mr. Nitin after serving Lion Ltd. for 4 years resigned his job to commence a business of his own. Provident fund account consisted of own contribution ` 50,000; employer’s contribution ` 50,000 and interest of ` 20,000 being attributable equally to the said contributions. How much would be the amount deductible at source under section 192A? (i)

` 12,000 being 10% of the total withdrawal

(ii)

` 10,000 being 10% of the contributions

(iii) ` 6,000 being 10% of employer’s contribution and interest thereon (iv) ` 2,000 being 10% of interest on the contributions

[2 Marks] 7

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MCQs on TDS

(31) If a person responsible for deduction of tax at source, after deduction, fails to deposit the same into the Government treasury, will be liable to pay interest @ : (i)

1% per month or part of the month

(ii)

1.5% per month or part of the month

(iii) 2% per month or part of the month (iv) 15% per annum

[1 Mark]

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8

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MCQs on TCS

“MCQs on TCS” (1)

A motor car of the value of ` 15 Lakhs was sold by a dealer to a customer. ` 9 Lakhs was received in cash and the balance by account payee cheque. Which of the following statements is correct? (i)

Tax @1% has to be collected on ` 15 Lakhs

(ii)

Tax @1% has to be collected on ` 9 Lakhs only

(iii) Tax @1% has to be collected on ` 6 Lakhs only (iv) No tax collection at source is required in this case, since the amount received in cash does not exceed ` 10 Lakhs. [1 Mark] (2)

Two motor cars of the value of ` 12 Lakhs and `8 Lakhs was sold by a manufacturer to a distributor. (i)

Tax @ 1% has to be collected on ` 20 Lakhs

(ii)

Tax @ 1% has to be collected on ` 12 Lakhs

(iii) Tax @ 1% has to be collected on ` 8 Lakhs (iv) No tax collection at source is required in this case

[1 Mark]

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1

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MCQs on Advance Tax

“MCQ on Advance Tax & Interests” (1)

Advance tax is payable by any person for the assessment year immediately following the financial year when the tax payable is _____ : (i)

`10,000 or more

(ii)

Less than `10,000

(iii) `5,000 or more (iv) Less than `5,000 (1)

[1 Mark]

Mr. R has obligation to file the return of income and his due date of filing the return of income was 31.07.2019. Total income of Mr. R is INR 12,00,000. However, the actual date of filing was 01.08.2019. (A) What is the relevant section for levying interest which shall be applicable for delay in filing of return; (B) What is the interest liability for delay in filing of return of income; (C) Whether any additional fee would also be applicable. If yes, under what section and what is the amount; (i)

(a) Section 234B; (b) 1.5% for 1 day; (c) No additional fee other than interest.

(ii)

(a) Section 234A; (b) 1% for a month; (c) Under section 234F & INR 5000.

(iii) (a) Section 234C; (b) 1% for 1 day; (c) Under section 234E & INR 1000. (iv) (a) Section 234A; (b) 1.5% for a month; (c) Under section 234E & INR 10000. (2)

[2 Marks]

Mr. A, non-resident aged 65 years, has income under the following heads for P.Y. 2018-19; 

Interest income taxable under “Income from other s...