NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Debt Products
Ms. Kavita Menon, a resident individual, receives interest of Rs 60,000 during the year on a company fixed deposit, from which the company deducts tax at source at 10% (assume her PAN is furnished and the TDS threshold is exceeded). She is in the 30% slab; ignore surcharge and cess. What additional tax does she owe on this interest?
She owes Rs 12,000 more. Tax at 30 percent on Rs 60,000 is Rs 18,000, and the Rs 6,000 already deducted as TDS is credited against it, leaving Rs 12,000 payable.
- ARs 6,000
- BRs 12,000Correct
- CRs 18,000
- DRs 24,000
Explanation
Total tax on the interest at 30% = 0.30 x 60,000 = Rs 18,000. TDS already deducted = 10% x 60,000 = Rs 6,000. Balance payable = 18,000 - 6,000 = Rs 12,000. Rs 6,000 is just the TDS, and Rs 18,000 ignores credit for TDS.
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