Mr. Rahul, a resident individual, starts a new business on 01-11-2024 for sale of designer suits. He obtained a valid PAN in his name and registers…

CA Final · Direct Tax Laws and International Taxation · MTP · January 2026
Mr. Rahul, a resident individual, starts a new business on 01-11-2024 for sale of designer suits. He obtained a valid PAN in his name and registers himself on Shine.com (a Country M based website), an e-commerce operator, for sale of his products in India. Mr. Rahul sold goods worth 80 lakhs through Shine.com upto 31-03-2025. E-commerce operator credited 35 lakhs on 31.12.2024,12 lakhs on 1.1.2025 and 18 lakhs on 28.2.2025 payable to Mr. Rahul in its books of accounts. These amounts were paid to Mr. Rahul on 15.3.2025 after deducting a commission of 10% on gross sale proceeds. On 31.3.2025, remaining amount of 15,00,000 were directly credited in Mr. Rahul bank account by the buyers. Who is liable to deduct tax at source on the above transactions? When and what amount of tax is deductible?
(A) Shine.com is required to deduct tax at source of 35,000,12,000,18,000 and - 15,000 on 31.12.2024, 1.1.2025, 28.2.2025 and on 31.3.2025, respectively.
(B) Shine.com is required to deduct tax at source of 3,500,1,200,1,800 and - 1,500 on 31.12.2024, 1.1.2025, 28.2.2025 and on 31.3.2025, respectively.
(C) Shine.com is required to deduct tax at source of 80,000 on 15.3.2025.
(D) Shine.com is required to deduct tax at source of 65,000 on 15.3.2025.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Shine.com is required to deduct tax at source of 3,500,1,200,1,800 and - 1,500 on 31.12.2024, 1.1.2025, 28.2.2025 and on 31.3.2025, respectively.

Topics: Double Taxation Relief, Non-Resident Taxation

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