State Government of Madhya Pradesh grants a lease of coal mine to M/s Maple Co. Ltd. on 01.09.2023 and charged 12 crores for the lease. M/s Maple…
CA Final · Direct Tax Laws and International Taxation · MTP · May 2024
State Government of Madhya Pradesh grants a lease of coal mine to M/s Maple Co. Ltd. on 01.09.2023 and charged 12 crores for the lease. M/s Maple Co. Ltd. sold coal for 1 crore to M/s DL (P) Ltd. during the previous year 2023-24. The turnover of M/s Maple Co. and M/s DL (P) Ltd. for the financial year 2022-23 amounted to 7 crores and 8 crores, respectively.
Suggested Answer and Working Notes:
State Government is required to collect tax at source@2% u/s 206C(1C) on 12 crores, being the charges for lease of coal mine. TCS = 2% x 12 crores = 24,00,000 M/s Maple Co. Ltd. is required to collect tax at source @1% u/s 206C (1) on sale of coal to M/s DL (P) Ltd. TCS = 1% of 1crore = 1,00,000.
Topics: Deduction, Collection and Recovery of Tax
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