Advance Tax, TDS & TCS

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Illustrations:

Illustration 1

Find out the amount of advance tax payable by A on specified dates for the
financial year 2021-22:
• Business income (Tax of Rs.4,704 is deducted at source): Rs. 5,11,000
• Agricultural income: Rs. 86,000

Illustration 2

Examine the TDS implications under section 194A in the cases mentioned
hereunder–
• On 1.10.2021, Mr. Harish made a six-month fixed deposit of Rs.10 lakh@9% p.a.
with ABC Co-operative Bank. The fixed deposit matures on 31.3.2022.
• On 1.6.2021, Mr. Ganesh made three nine months fixed deposits of Rs.3 lakh
each, carrying interest@9% with Dwarka Branch, Janakpuri Branch and Rohini
Branch of XYZ Bank, a bank which has adopted CBS. The fixed deposits mature
on 28.2.2022.
• On 1.10.2021, Mr. Rajesh started a six-month recurring deposit of Rs.2,00,000
per month @ 8% p.a. with PQR Bank. The recurring deposit matures on
31.3.2022.

Illustration3

Examine the applicability of the provisions for tax deduction at source under
section 194DA in the following cases -
• Mr. X, a resident, is due to receive Rs. 4.50 lakhs on 31.3.2022, towards maturity
proceeds of LIC policy taken on 1.4.2019, for which the sum assured is Rs.4
lakhs and the annual premium is Rs.1,25,000.
• Mr. Y, a resident, is due to receive Rs. 3.25 lakhs on 31.3.2022 on LIC policy
taken on 31.3.2012, for which the sum assured is Rs. 3 lakhs and the annual
premium is Rs. 30,100.
• Mr. Z, a resident, is due to receive Rs.95,000 on 1.8.2021 towards maturity
proceeds of LIC policy taken on 1.8.2014 for which the sum assured is Rs.90,000
and the annual premium was Rs.10,000.

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Illustration 4
• Mr. X sold his house property in Bangalore as well as his rural agricultural land
for a consideration of Rs.60 lakh and Rs.15 lakh, respectively, to Mr. Y on
1.8.2021.
• He has purchased the house property and the land in the year 2020 for Rs.40
lakh and Rs. 10 lakhs, respectively.
• The stamp duty value on the date of transfer, i.e., 1.8.2021, is Rs. 85 lakh
and Rs. 20 lakhs for the house property and rural agricultural land,
respectively.
• Examine the tax implications in the hands of Mr. X and Mr. Y and the TDS
implications, if any, in the hands of Mr. Y, assuming that both Mr. X and Mr. Y
are resident Indians.

Illustration 5

• Mr. X, a salaried individual, pays rent of Rs. 55,000 per month to Mr. Y
from June 2021. Is he required to deduct tax at source?
• If so, when is he required to deduct tax? Also, compute the amount of tax to be
deducted at source.
• Would your answer change if Mr. X vacated the premises on
31st December 2021?
• Also, what would be your answer if Mr. Y does not provide his PAN to Mr. X?

Illustration 6

Ashwin doing manufacture and wholesale trade furnishes you the following
information:
Total turnover for the financial year
Particulars Amount (Rs.)
2019-20 1,05,00,000
2020-21 95,00,000
Examine whether tax deduction at source provisions are attracted for the below
said expenses incurred during the financial year 2020-21:
Particulars Amount (Rs.)
Interest paid to UCO Bank on 15.8.2020 41,000
Contract payment to Raj (2 contracts of Rs.12,000 each) on
24,000
12.12.2020
Shop rent paid (one payee) on 21.1.2021 2,50,000
Commission paid to Balu on 15.3.2021 7,000

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Illustration 7

Compute the amount of tax deduction at source on the following payments made
by M/s. S Ltd. during the financial year 2020-21 as per the provisions of the Income-
tax Act, 1961.
Date Nature of Payment
1-10-2020 Payment of Rs.2,00,000 to Mr. “R” a transporter who owns 8 goods
carriages throughout the previous year and furnishes a declaration
to this effect along with his PAN.
1-11-2020 Payment of fee for technical services of Rs.25,000 and Royalty of
Rs.20,000 to Mr. Shyam who is having PAN.
30-06-2020 Payment of Rs.25,000 to M/s X Ltd. for repair of building.
01-01-2021 Payment of Rs.2,00,000 made to Mr. A for purchase of diaries made
according to specifications of M/s S Ltd. However, no material was
supplied for such diaries to Mr. A by M/s S Ltd or its associates.
01-01-2021 Payment made Rs.1,80,000 to Mr. Bharat for compulsory acquisition
of his house as per law of the State Government.
01-02-2021 Payment of commission of Rs.14,000 to Mr. Y.

Illustration 8

Examine the applicability of TDS provisions and TDS amount in the following
cases:
• Rent paid for hire of machinery by B Ltd. to Mr. Raman Rs.2,60,000 on
27.9.2020.
• Fee paid on 1.12.2020 to Dr. Srivatsan by Sundar (HUF) Rs.35,000 for surgery
performed on a member of the family.
• ABC and Co. Ltd. paid Rs.19,000 to one of its Directors as sitting fees on 01-01-
2021.

Illustration 9

Examine the applicability of tax deduction at source provisions, the rate and
amount of tax deduction in the following cases for the financial year 2020-21:
• Payment of Rs. 27,000 made to Jacques Kallis, a South African cricketer, by an
Indian newspaper agency on 02-07-2020 for contribution of articles in relation
to the sport of cricket.
• Payment made by a company to Mr. Ram, sub-contractor, Rs.3,00,000 with
outstanding balance of Rs. 1,20,000 shown in the books as on 31-03-2021.

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• Winning from horse race Rs.1,50,000 paid to Mr. Shyam, an Indian resident.
• Rs.2,00,000 paid to Mr. A, a resident individual, on 22-02-2021 by the State of
Uttar Pradesh on compulsory acquisition of his urban land.

Illustration 10

• Mr. Jay having total income of Rs.8,70,000, did not pay any advance tax during
the previous year 2020-21.
• He wishes to pay the whole of the tax, along with interest if any, on filing the
return in the month of July, 2021.
• What is total tax which Mr. Jay has to deposit as self-assessment tax along with
interest, if he files the return on 29.07.2021?
• Assume that he does not exercise the option under section 115BAC.

Illustration 11

Find out the amount of advance tax payable by Mr. A on specified dates under the
Income tax Act, 1961 for the financial year 2020-21:
Particular Amount
Business income 4,85,000
Long term capital gain on 31-5-2020 60,000
Winning from lotteries on 12-6-2020 50,000
Interest on loan 10,000
Other income 5,000
Investment in PPF 10,000
Tax deducted at source:
Case 1 38,000
Case 2 15,000

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