ABC Ltd. failed to deduct tax at source on rent payable of ₹2,50,000 to Mr. Ghanshyam, a resident during the financial year 2020-21. Mr. Ghanshyam did not pay tax on such income. What is the amount of disallowance to ABC

CS Executive · Tax Laws and Practice · PYQS · December 2021
ABC Ltd. failed to deduct tax at source on rent payable of ₹2,50,000 to Mr. Ghanshyam, a resident during the financial year 2020-21. Mr. Ghanshyam did not pay tax on such income. What is the amount of disallowance to ABC Ltd. according to Income Tax Act, 1961 for the Assessment Year 2021-22 ?
(A) Disallowance of 20% of such expenditure
(B) Disallowance of 30% of such expenditure
(C) Disallowance of 50% of such expenditure
(D) Disallowance of 100% of such expenditure

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Income Tax Act, 1961

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