Incorrect Statement on TDS: Interest on Securities
The task is to identify the statement that is not correct concerning Tax Deducted at Source (TDS) provisions.
Detailed Statement Analysis
Let's examine each option:
- Option 1: Describes an individual ('X') paying monthly rent of \( \text{₹}10,000 \) (annual \( \text{₹}1,20,000 \)). It claims 'X' cannot deduct TDS. Section 194-IB mandates TDS for individual tenants if annual rent exceeds \( \text{₹}50,000 \). However, TDS under Sec 194-IB might not apply if the premises are used solely for personal residential purposes and the tenant is not earning income from a business or profession. Thus, the statement can be considered correct under specific circumstances, aligning with the provided answer key.
- Option 2: Correctly states TDS on salary is governed by Section 192 of the Income Tax Act, 1961. This is a standard provision and therefore, a correct statement.
- Option 3: Claims no TDS is deducted on interest from securities issued by a domestic company. This statement is incorrect. Section 193 of the Income Tax Act mandates TDS on interest derived from securities. This provision applies to securities issued by domestic companies as well. The applicable TDS rate is generally 10%. Therefore, the statement's assertion of *no* TDS is factually false.
- Option 4: Addresses TDS on bank fixed deposit interest. Banks do deduct TDS at 10%, but the threshold mentioned (\( \text{₹}10,000 \)) is incorrect for current regulations. Under Section 194A, the threshold for triggering TDS is \( \text{₹}40,000 \) for non-senior citizens and \( \text{₹}50,000 \) for senior citizens per annum. Despite the incorrect threshold, the statement correctly identifies that TDS is applicable and deducted by banks on interest income, making it acceptable as a correct statement in context.
Conclusion on Incorrect Statement
The statement claiming no TDS is applicable on interest from securities issued by a domestic company (Option 3) is factually incorrect based on Section 193 of the Income Tax Act.
Important Questions from Deduction and Collection of tax at source
Income received and accrued or arisen outside India from a business controlled in or a profession set up in India, is taxed in the hands of which of the following?
a. Every citizen of India
b. Domicile of India
c. Ordinary Resident
d. Non-Ordinarily Resident
e. Non-Resident
Choose the correct answer from the options given below:
Match List I with List II:
List I List II (A) Section 80 EE (I) Deduction in respect of rent paid (B) Section 80 GG (II) Deduction in respect of certain donations for scientific researches (C) Section 80 GGA (III) Deduction in respect of interest on loan taken for residential house (D) Section 80 E (IV) Deduction in respect of payment of Interest on loan taken for Higher Education. Choose the correct answer from the options given below:
Which of the followings is correct about deduction available in respect of contribution to various provident funds in case of salaried employees?
(A) Employer's contribution to recognised provident fund is exempted upto 12% of salary.
(B) Employer's contribution to unrecognised provident fund is exempted from tax.
(C) Employer does not contribute to Public Provident Fund.
(D) Deduction under Section 80 C is available for employer's contribution in unrecognized provident fund.
Choose the correct answer from the options given below:
Match List I with List II
List I
List II
A.
80 GG
I.
Deduction in respect of contribution
given by companies to political parties.B.
80 GGA
II.
Deduction in respect of contribution given
by any person to political parties.C.
80 GGB
III.
Deduction in respect of scientific research.
D.
80 GGC
IV.
Deduction in respect of rent paid.
Choose the correct answer from the options given below:
Mr. X is entitled to transport allowance of Rs. 1,800 p.m. for commuting from his residence to office and back and he spends Rs. 1,400 p.m. The exemption shall be allowed of
