GlobalLink Trading Pvt. Ltd. withdrew a total of 1.80 crores in cash from its current account with National Bank Ltd. during the financial year…
CA Final · Direct Tax Laws and International Taxation · MTP · September 2025
GlobalLink Trading Pvt. Ltd. withdrew a total of 1.80 crores in cash from its current account with National Bank Ltd. during the financial year 2024-25. The last cash withdrawal of 30 lakhs was made on 5th December 2024. In the same financial year, an official diplomatic mission of Canada duly approved by the Ministry of External Affairs, Government of India, withdrew 2 crore in cash from its bank account with National Bank Ltd. on 10th December 2024 for its official activities. Is National Bank Ltd. requiring to deduct tax at source on these cash withdrawals? Assume GlobalLink Trading Pvt. Ltd. regularly files its return of income.
Suggested Answer and Working Notes:
Correct Answer: Option (A)
National Bank Ltd. has to deduct tax at source @2% on 80 lakhs, being the amount exceeding 1 crore withdrawn by GlobalLink Trading Pvt. Ltd., but no tax is required to be deducted for cash withdrawal by the diplomatic mission of Canada.
Topics: Assessment of Various Entities
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