Examine the applicability of tax deduction at source as per the Income-tax Act, 1961 for the assessment year 2025-26 in the following independent…

(b) (i) As the gross receipts of the profession carried on by Dr. Ram Narayan for F.Y. 2023-24 has exceeded 50lakhs, he is required to deduct tax at source under section 194A @10% on 2,50,000, being the interest on borrowed funds from a friend. (ii) Since Mr. Mahesh has furnished his return of income for one of the assessment year's i.e., A.Y. 2024-25 out of the three assessment years relevant to the three previous years, for which the due date for filing return of income has expired at the time of cash withdrawals i.e., August and September 2024, the bank is required to deduct tax at source under section 194N @2% on the cash withdrawals of 1crore, being the amount exceeding 1crore. Alternate answer – If it is assumed that the due date for filing return of income for A.Y. 2024-25 for Mr. Mahesh is 31st October 2024, being the date after the months in which he made the cash withdrawals, alternate answer can be given as follows: Since Mr. Mahesh has not furnished the return of income for all the three assessment years relevant to the three previous years for which due date of filing return of income has expired at the time cash withdrawals, the bank is required to deduct tax at source under section 194N @2% on 80 lakhs, being the sum exceeding 20lakhs but does not exceed 1crore and @5% on 1 crore, being the amount exceeding 1crore.