(b) Answer the following: (i) M/s. PQR & Co., a proprietary firm of Mr. Yogesh, paid an amount of 30,500 to Mr. Amit, a resident individual aged…

(i) M/s PQR & Co. is required to deduct tax at source under section 194J @10% on the professional fees paid to Mr. Amit of 30,500 and - 60,000 on 1 st June 2023 and 30 th January 2024, respectively, assuming M/s PQR & Co. turnover/gross receipts exceeds the prescribed threshold limit 1 . However, M/s PQR & Co. has not deducted the tax at source during the P.Y. 2023-24, disallowance of 27,150, being 30% of 90,500 would be attracted u/s 40(a)(ia) though Mr. Amit has filed his return of income considering the professional fees from M/s PQR & Co. and paid taxes on the same. In such a case, M/s PQR & Co. would not be deemed as assessee in default by virtue of the first proviso to section 201 (1) and the amount disallowed i.e., 27,150 would be allowed as deduction in A.Y. 2025-26. For non-deduction of tax at source, interest @1% would be leviable under section 201(1A) (i) for every month or part of the month on the amount of tax from the date on which such tax was deductible to the date such tax was paid by the payee i.e., 2.5.2024. Interest @1% on 3,050 (10% of 30,500) from June 2023 to May 2024 = 366 and on 6,000 (10% of 60,000) from January, 2024 to May 2024 = 300 is payable by M/s PQR & Co. (ii) M/s. Fastest Ltd. is not required to collect tax at source u/s 206C(1F) on sale of cars of 150lakhs to M/s. Race LLP, since such sale is to a distributor and sale price of each car does not exceed 10lakhs. M/s. Race LLP is also not required to deduct tax at source u/s 194Q, since its turnover, being a buyer in the P.Y. 2022-23 does not exceed 10crores. However, M/s Fastest Ltd. is required to collect tax at source u/s 206C(1H) @0.1% on the sale consideration exceeding 50lakhs i.e. on 100 lakhs since turnover of M/s Fastest Ltd. exceeds 10crores and TCS u/s 206C(1F) and TDS u/s 194Q is not applicable.