Examine the applicability of Tax Deduction at Source (TDS) or Tax Collection at Source (TCS) under the provisions of the Income-tax Act, 1961, for…

First Alternative (i) Since Mr. Singh's turnover for F.Y.2024-25 exceeds ₹ 10 crores, and payments made by him to Mr. Sabharwal, a resident seller exceed ₹ 50 lakhs in the P.Y.2025-26, he is liable to deduct [email protected]% of ₹ 45 lakhs (being the sum exceeding ₹ 50 lakhs) in the following manner – No tax is to be deducted u/s 194Q on the payments made on 1.6.2025 and 12.8.2025, since the aggregate payments till that date i.e. ₹ 45 lakhs, has not exceeded the threshold of ₹ 50 lakhs. Tax of ₹ 1,700 (i.e., 0.1% of ₹ 17 lakhs) has to be deducted u/s 194Q from the payment/credit of ₹ 22 lakh on 23.11.2025 [₹ 22 lakh – ₹ 5 lakhs, being the balance unexhausted threshold limit]. Tax of ₹ 2,800 (i.e., 0.1% of ₹ 28 lakhs) has to be deducted u/s 194Q from the payment/credit of ₹ 28 lakhs on 25.3.2026. (ii) M/s. Global Travels, being a seller of an overseas tour programme package has to collect tax at source under section 206C(1G) from Mr. Karthik on receiving amount for purchase of package. Accordingly, tax has to be collected @5% upto ₹ 10 lakhs received and @20% on amount exceeding above ₹ 10 lakhs. M/s. Global Travels has to collect tax of ₹ 90,000, being ₹ 50,000 (5% of ₹ 10 lakhs) and ₹ 40,000 (20% of ₹ 2 lakhs). State Bank of India, being an authorized dealer has to collect tax at source under section 206C(1G) @20% on amount in excess of ₹ 10 lakhs remitted under the LRS. Since in the present case, amount remitted under LRS is ₹ 10 lakhs only, State Bank of India is not required to collect tax at source under section 206C(1G). OR Second Alternative An updated return can be furnished for the previous year relevant to the assessment year at any time within 48 months from the end of the relevant assessment year. Accordingly, the following are the suggestions to Ms. Pooja with respect to furnishing of the updated return on 28.5.2026 for A.Y. 2024-25 and A.Y. 2025-26: A.Y. 2024-25: For A.Y. 2024-25, an updated return can be furnished up to 31.3.2029. Thus, an updated return can be furnished on 28.5.2026. Since the updated return would be furnished after the expiry of 12 months but before 24 months from the end of 31.3.2025, additional income tax would be payable @50% of the aggregate of tax (after taking into consideration tax deducted at source) and interest payable. However in this case, since a refund of ₹ 4,40,000 (₹ 5,60,000, being tax liability - ₹ 10,00,000, being TDS deducted) would arise, an updated return cannot be furnished for A.Y. 2024-25. A.Y. 2025-26: For A.Y. 2025-26, an updated return can be furnished up to 31.3.2030. Thus, an updated return can be furnished on 28.5.2026. Since the updated return would be furnished before the expiry of 12 months from the end of 31.3.2026, additional income tax would be payable @25% of the aggregate of tax (after taking into consideration tax deducted at source and self-assessment tax paid) and interest payable. Accordingly, Ms. Pooja is required to pay additional income-tax of ₹ 1,05,000 i.e., 25% of ₹ 4,20,000 [₹ 3,30,000 (₹ 6,30,000 – ₹ 2,00,000 – ₹ 1,00,000) + ₹ 90,000] in addition to tax payable of ₹ 3,30,000, interest payable of ₹ 90,000 and late fees of ₹ 5,000.