A firm pays salary and interest on capital to its resident partners. The salary and interest paid fall within the limits specified in section 40(b).…

CA Intermediate · Taxation · MTP · May 2026
A firm pays salary and interest on capital to its resident partners. The salary and interest paid fall within the limits specified in section 40(b). Which of the following statements is true?
(A) Tax has to be deducted u/s 192 on salary and u/s 194A on interest
(B) Tax has to be deducted u/s 192 on salary but no tax needs to be deducted on interest
(C) No tax has to be deducted on salary but tax has to be deducted u/s 194A on interest
(D) No tax has to be deducted u/s 194T on salary and interest

Suggested Answer and Working Notes:

Correct Answer: Option (D)

No tax has to be deducted u/s 194T on salary and interest

Topics: Paper 3A: Income Tax Laws

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