CS Professional · Advanced Direct Tax Laws and Practice · Income Tax Implication on Specified Transactions
Under the Income-tax Act, 2025, Meera Industries Ltd pays Rs 50 lakh to a financial institution located in a notified jurisdictional area and claims it as a deduction. Which condition must be met for the deduction to be allowed?
The deduction is allowed only if the assessee furnishes an authorisation in the prescribed form permitting the Board or another income-tax authority to seek relevant information from the financial institution. Without it, no deduction is allowed for the payment.
- AThe assessee furnishes an authorisation in the prescribed form allowing the Board or another income-tax authority to seek information from the institutionCorrect
- BThe payment is made only through a bank in India
- CThe institution is registered with the Reserve Bank of India
- DTax is deducted at 30% on the payment
Explanation
Section 176(3)(a) bars a deduction for a payment to a financial institution in a notified jurisdictional area unless the assessee furnishes the prescribed-form authorisation for the Board or another income-tax authority to seek information from that institution. TDS at 30% under section 176(5) is a separate rule and does not make the deduction allowable.
Did you get it right without looking?
One question tells you little. A timed set on Income Tax Implication on Specified Transactions shows your real accuracy, how long you take and where you lose marks.
More Income Tax Implication on Specified Transactions questions
- Under section 116 of the Income-tax Act, 2025, an amalgamation effected on or after 1 April 2025 passes a business loss to the amalgamated c…
- Under section 533(4) of the Income-tax Act, 2025, which statement on retrospective effect of rules is correct?
- Under the Income-tax Act, 2025, Alpha Ltd demerges an undertaking into Beta Ltd. Alpha's accumulated loss is Rs 90 lakh, of which Rs 30 lakh…
- Under the Income-tax Act, 2025, section 215 exemption on the transfer of a foreign exchange asset is available to which assessee?
- Which of the following matters is NOT specifically listed in section 533(2) of the Income-tax Act, 2025 as a subject on which rules may be m…
- Under the Income-tax Act, 2025 (applicable from the June 2027 session), the accumulated loss and unabsorbed depreciation of an amalgamating …