A specified person pays a resident ₹80,000 a month as rent for plant and machinery. The payee has furnished a valid PAN. At what rate must tax be deducted under section 393(1) of the Income-tax Act,…
Question and options
A specified person pays a resident ₹80,000 a month as rent for plant and machinery. The payee has furnished a valid PAN. At what rate must tax be deducted under section 393(1) of the Income-tax Act, 2025?
10%
1%
2%
5%
Answer and explanation
Correct answer: C - 2%
Item 2(ii) of the Table in section 393(1) of the Income-tax Act, 2025 prescribes 2% on rent paid by a specified person for the use of machinery, plant or equipment, where the rent exceeds ₹50,000 for a month or part of a month. The 10% rate applies to rent for land, buildings, furniture or fittings.
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