Topic wise Test Papers of CA FINAL - Direct Tax – MAY/NOV - 24 Exams

Paper - 10
Topic: TDS
Total Marks: 20 Marks
Time Allowed: 40 minute

Questions:

Part-A Multiple Choice Questions

[Total 20 Marks – 2 Marks for each MCQ]
Que. 1 TDS
Mr. Sanjay, a salaried individual, pays brokerage of ₹ 40 lakhs to Mr. Harish, a broker, on 5.1.2024 to buy
a residential house. His father, Mr. Hari, a retired pensioner, makes contract payments of ₹ 15 lakhs, ₹
25 lakhs and ₹ 12 lakhs on 28.9.2023, 3.11.2023 and 15.2.2024 to Mr. Rajeev, a contractor, for
reconstruction of residential house. With respect to the above payments made by Mr. Sanjay and Mr.
Hari, which of the following statements is correct?
(a) Neither Mr. Sanjay nor Mr. Hari is required to deduct tax at source, since they are not subject to tax
audit, on account of being a salaried individual and pensioner, respectively
(b) Both Mr. Sanjay and Mr. Hari are required to deduct tax at source under the provisions of the Income-
tax Act, even though they are not subject to tax audit
(c) Mr. Sanjay is required to deduct tax at source but Mr. Hari is not required to deduct tax at source
(d) Mr. Hari is required to deduct tax at source but Mr. Sanjay is not required to deduct tax at source

Que. 2 TDS
Mr. Rajesh and Mr. Brijesh, resident individuals, are due to receive ₹ 12 lakhs each on 1.4.2022 on
maturity of life insurance policy taken on 31.3.2012 and 1.4.2012, respectively, the sum assured of which
is ₹ 10 lakhs. They had paid an annual premium of ₹ 1.10 lakhs each. Are provisions of tax deduction at
source attracted on maturity proceeds received by Mr. Rajesh and Mr. Brijesh?
(a) Yes; Tax is deductible at source on maturity proceeds receivable by both Mr. Rajesh and Mr. Brijesh,
since the annual premium is more than ₹ 1,00,000, being 10% of ₹ 10 lakhs
(b) No; Tax is not deductible at source on maturity proceeds receivable by either Mr. Rajesh or Mr. Brijesh,
since the annual premium is less than ₹ 1,20,000, being 10% of ₹ 12 lakhs
(c) No tax is deductible at source on maturity proceeds receivable by Mr. Rajesh. Tax is deductible at source
on maturity proceeds received by Mr. Brijesh and the tax deductible at source is ₹ 12,000
(d) No tax is deductible at source on maturity proceeds receivable by Mr. Rajesh. Tax is deductible at source
on maturity proceeds received by Mr. Brijesh and the tax deductible at source is ₹ 5,000

Que. 3 TDS
Air India Ltd. has paid an amount of ₹ 20 lakhs on 1.4.2023 to Airports Authority of India towards landing
and parking charges for the month of April, 2022. Which of the following statements is correct?
(a) No tax is deductible at source on such payment
(b) Tax is deductible at source@2% u/s 194C on such payment
(c) Tax is deductible at source@2% u/s 194-I on such payment
(d) Tax is deductible at source@10% u/s 194-I on such payment

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2 Test Papers of CA Final - Direct Tax - MAY/NOV-24 Exams — Questions

Que. 4 TDS
ABC Ltd. took on sub-lease a building from Ms. Jhanvi with effect from 1.7.2023 on a rent of ₹ 20,000
per month. It also took on hire machinery from Ms. Jhanvi with effect from 1.10.2023 on hire charges of
₹ 15,000 per month. ABC Ltd. entered into two separate agreements with Ms. Jhanvi for sub-lease of
building and hiring of machinery. Which of the following statements is correct with reference to ABC
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?
(a) No tax needs to be deducted at source since rent for building does not exceed ₹ 2,40,000 p.a. and rent
for machinery also does not exceed ₹ 2,40,000 p.a. Security deposit refundable at the end of the lease
term is not rent for the purpose of TDS
(b) Tax has to be deducted@10% on ₹ 2,00,000 and @2% on ₹ 1,05,000 (i.e., rent including security
deposit)
(c) Tax has to be deducted@10% on ₹ 1,80,000 and @2% on ₹ 90,000 (i.e., rent excluding security deposit)
(d) Tax has to be deducted@10% on ₹ 2,00,000 (i.e., rent including security deposit). However, no tax is to
be deducted on rent of ₹ 1,05,000 (i.e., rent including security deposit) for machinery, since the same
does not exceed ₹ 2,40,000

Que. 5 TDS
Mr. X acquired a house property at Mumbai from Mr. Y, a resident, for a consideration of ₹ 90 lakhs, on
20.6.2023. 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 lakhs and rural agricultural land from Mr. D for a consideration
of ₹ 60 lakhs. Which of the following statements is correct?
(a) No tax deduction at source is required in respect of any of the three payments
(b) TDS @ 1% is attracted on all the three payments
(c) TDS @ 1% on ₹ 90 lakhs and ₹ 49.50 lakhs are attracted. No TDS on payment of ₹ 60 lakhs for acquisition
of rural agricultural land
(d) TDS@1% on ₹ 90 lakhs is attracted. No TDS on payments of ₹ 49.50 lakhs and ₹ 60 lakhs

Que. 6 TDS
Mr. Ganesh is running a steel factory. The total turnover of the factory during the F.Y. 2022-23 amounted
to ₹ 2.5 crores. The estimated turnover for F.Y. 2023-24 is likely to exceed ₹ 3 crore. On 10-04-2023, he
availed consultancy services from a Delhi based chartered accountant. The consultancy fees amounted
to ₹ 1,84,000. Should Mr. Ganesh deduct tax from consultancy fees of ₹ 1,84,000? If yes, then what shall
be the amount of tax to be deducted and by when should the same be deposited with Government?
(a) Yes; ₹ 18,400 to be deposited by 07.05.2023
(b) Yes; ₹ 18,400 to be deposited by 07.07.2023
(c) Yes; ₹ 15,400 to be deposited by 07.05.2023
(d) He is not liable to deduct tax in respect of professional fees paid

Que. 7 TDS
Kunal & Co LLP engaged in manufacturing business withdrew from its bank account ₹ 125 lakhs by cash
(each individual withdrawal does not exceed ₹ 2 lakhs) in the P.Y.2023-24. The purpose of withdrawal
from bank was for buying agricultural produce, being raw material required for manufacture for finished
products by it. Kunal & Co LLP always files its return of income before the due date. Are TDS provisions
applicable on such withdrawals? If yes, what is the amount of tax to be deducted?
(a) No; TDS provisions are not attracted (b) Yes; Tax of ₹ 50,000 is required to be deducted

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 Test Papers of CA Final - Direct Tax - MAY/NOV-24 Exams — Questions 3
Yes; Tax of ₹ 1,25,000 is required to be Yes; Tax of ₹ 2,10,000 is required to be
(c) (d)
deducted deducted

Que. 8 TDS
The following are details of cash withdrawals from Canara Bank by Mr. Ravish during the P.Y. 2023-24:
• ₹ 16 lakhs on 27.05.2023
• ₹ 55 lakhs on 07.09.2023
• ₹ 28 Lakhs on 12.02.2024
Mr. Ravish has not filed his return of income for A.Y. 2020-21, A.Y. 2021-22 and A.Y. 2022-23. What is
the amount of tax required to be deducted at source by Canara Bank on such withdrawals during the
P.Y. 2023-24?
(a) ₹ 1,58,000 (b) ₹ 1,98,000
(c) ₹ 3,95,000 (d) Nil

Que. 9 TDS/TCS
Mr. Aadesh, a resident Indian, purchased an apartment in Ashiana Gardens, a gated housing complex,
from M/s. Ashiana Constructions Ltd., an Indian company, for ₹ 48 lakhs. In addition, he paid ₹ 1 lakh for
club membership fees and ₹ 1 lakh for car parking fee. The stamp duty value of the apartment on the
date of transfer was ₹ 49.80 lakhs. Is Mr. Aadesh liable to deduct tax at source in respect of this
transaction? If so, how much?
(a) No, Aadesh is not liable to deduct tax at source, as both the consideration and the stamp duty value do
not exceed ₹ 50 lakh.
(b) No, Aadesh is not liable to deduct tax at source, as the lower of stamp duty value and the consideration,
is less than ₹ 50 lakh.
(c) Yes, Aadesh is liable to deduct tax of ₹ 49,800
(d) Yes, Aadesh is liable to deduct tax of ₹ 50,000

Que. 10 TDS
Mr. Vallish, employed as Manager with ABC Ltd., pays rent of ₹ 50,000 per month to his landlord. Which
of the following statements is correct?
(a) Mr. Vallish is liable to deduct tax@10% u/s 194-I, since his annual rent exceeds ₹ 2,40,000
(b) Mr. Vallish is liable to deduct tax@5% u/s 194-IB every month, since he pays rent of ₹ 50,000 per month
(c) Mr. Vallish is liable to deduct tax@5% u/s 194-IB on the annual rent in the month of March, since he
pays rent of ₹ 50,000 per month
(d) Mr. Vallish is not liable to deduct tax at source

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