➡️DT MCQ from ICAI New Booklet 2023

1. Mr. Rajesh and mr. Brijesh, resident individuals, are due to receive 13 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 1,30,000, being 10% of 13 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 13,000

(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 ` 10,000

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➡️DT MCQ from ICAI New Booklet 2023

2. Abc ltd. Took on sub-lease a building from ms. Jhanvi with effect from 1.7.2022 on a rent of 20,000 per month. It also took on hire machinery from ms. Jhanvi with effect from 1.10.2022 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 ` 1,80,000

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➡️DT MCQ from ICAI New Booklet 2023

3. 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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➡️DT MCQ from ICAI New Booklet 2023

4. Mr. Hari is an interior decorator declaring profits under 44ADA in the P.Y.2022-23 and the earlier previous years. Mr. Hari has to pay brokerage of 10 lakhs to Mr. Lal, a broker, to buy a residential house, and 50 lakhs to Mr. Shyam, a contractor for reconstruction of the residential house.

Are TDS provisions attracted in the hands of Mr. Hari in respect of the above transactions?

(a) No; TDS provisions are not attracted in the hands of Mr. Hari in respect of payments to Mr. Lal and Mr. Shyam
(b) Yes; Mr. Hari has to deduct tax from payment to Mr. Lal and Mr. Shyam
(c) Mr. Hari does not have to deduct tax on payment to Mr. Lal but has to deduct tax from payment to Mr. Shyam
(d) Mr. Hari does not have to deduct tax on payment to Mr. Shyam but has to deduct tax from payment to Mr. Lal

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➡️DT MCQ from ICAI New Booklet 2023

5. Mr. Sanjay, a salaried individual, pays brokerage of 40 lakhs to Mr. Harish, a broker, on 5.1.2023 to buy a residential house. His father, Mr. Hari, a retired pensioner, makes contract payments of 15 lakhs, 25 lakhs and 12 lakhs on 28.9.2022, 3.11.2022 and 15.2.2023 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

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Kidzee Ltd., a wholesaler of toys registered in Chandigarh, is renowned in the local market for the varieties of toys and their reasonable prices. Kidzee Ltd. makes supply of 100 pieces of baby’s learning laptops and chat learning phones to Nancy General Store on 25th September, 20XX by issuing a tax invoice amounting to Rs. 1,00,000. However, the said toys were returned by Nancy General Store on 30th September, 20XX.

Which document Kidzee Ltd. is required to issue in such a case?

(a) Debit Note
(b) Refund voucher
(c) Credit note
(d) Payment voucher

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