Under the Income Tax Act, the 'TDS' on payment of rent for plant and machinery exceeding ₹1,80,000 per annum is governed by which section, and what is the rate? MCQ with Answer and Explanation
Under the Income Tax Act, the 'TDS' on payment of rent for plant and machinery exceeding ₹1,80,000 per annum is governed by which section, and what is the rate?
A. Section 194I at 10%
B. Section 194J at 10%
C. Section 194I at 2%
D. Section 194C at 2%
Answer: Option C
Solution (By JKSSB Mock Tests)
Section 194I(a) mandates TDS at 2% on rent paid for the use of plant, machinery, or equipment, provided the rent exceeds ₹1,80,000 in a financial year.
Explanation:
Credit purchases of assets (like machinery) do not go into the Purchases Book (which is only for trading goods) or Cash Book (as it's a credit transaction). They are recorded in the Journal Proper.
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