Examine and compute the liability for deduction of tax at source, if any, in the cases stated hereunder, for the financial year ended 31st March,…

TDS implications (i) Section 194-I, which governs the deduction of tax at source @10% on payment of rent, exceeding - 2,40,000 p.a., is applicable to all persons except individuals and HUF, whose turnover/gross receipts do not exceed 1crore in case of business or 50lakhs in case of profession during the financial year immediately preceding the financial year in which such rent is credited or paid. In the present case, State Bank of India has to deduct at source @10% on rental payment to Mr. Kunal. Tax deducted at source = 72,000 (₹ 7,20,000 x 10%) Section 196, however, provides exemption in respect of payments made to Government from application of the provisions of tax deduction at source. Therefore, no tax is required to be deducted at source by State Bank of India from rental payments to the Government. (ii) As per section 194C, no tax is required to be deducted at source on payment to transporter if the following conditions are satisfied: (1) He owns ten or less goods carriages at any time during the previous year. (2) He is engaged in the business of plying, hiring or leasing goods carriages; (3) He furnishes a declaration to this effect along with his PAN. In the present case, since Mr. Deepak has not furnished his PAN, tax is required to be deducted at source @ 20% under section 206AA on 2,50,000, since the same exceeds the threshold limit of 1,00,000. Tax deducted at source = 50,000 (₹ 2,50,000 x 20%)