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 194I at 2%
C. Section 194C at 2%
D. Section 194J at 10%
Answer: Option B
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.
S1: Under Ind AS 10, events after the reporting period are classified as adjusting and non-adjusting events. S2: If a customer of a company goes bankrupt after the reporting period due to a sudden natural disaster, it is an adjusting event. Which statement(s) is/are correct?
Explanation:
S1 is correct. S2 is incorrect because a bankruptcy due to a sudden natural disaster after the reporting period is a condition that arose *after* the reporting period, making it a non-adjusting event. Adjusting events relate to conditions that existed *at* the reporting period date.
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