NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Debt Products
Mr. Arvind Shah, a resident individual aged 40, holds a bank fixed deposit that pays interest of Rs 60,000 for the year. Assume the bank deducts TDS at 10% under the applicable rules, and his total income puts him in the 30% slab (ignore cess). What is his additional tax payable on this interest after adjusting TDS?
The additional tax is Rs 12,000. Interest of Rs 60,000 taxed at 30% gives Rs 18,000, and the TDS of Rs 6,000 already deducted is credited against it, leaving Rs 12,000 to be paid by the investor.
- ARs 6,000
- BRs 12,000
- CRs 18,000
- DRs 24,000Correct
Explanation
Tax at 30% on Rs 60,000 is Rs 18,000. TDS of 10% is Rs 6,000 already deducted. Balance payable is 18,000 - 6,000 = Rs 12,000. Rs 6,000 ignores the slab rate difference and Rs 18,000 ignores credit for TDS.
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