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Question 1Income Tax

Under the Income Tax Act, 1961, for how long must an individual ordinarily resident in India maintain records of foreign assets held during a year?

  1. Eight years from the end of the relevant assessment year Correct answer.
  2. Sixteen years from the end of the relevant assessment year
  3. Indefinitely, with no limitation period
  4. Five years from the end of the relevant assessment year

Explanation

The Income-tax Act read with the Foreign Exchange Management Act requires a resident and ordinarily resident individual to keep documentation of foreign assets for eight years from the end of the relevant assessment year. This period aligns with the general reassessment window and supports verification of Schedule FA disclosures.

Question 2Income Tax

Which form is used by a non-audit individual taxpayer to file the income tax return for a year in which total income includes capital gains?

  1. ITR-4
  2. ITR-1
  3. ITR-2 Correct answer.
  4. ITR-7

Explanation

ITR-2 is the return form for individuals and HUFs not carrying on business or profession, and it is mandatory where total income includes capital gains. ITR-1 is barred for capital gains, and ITR-4 applies to presumptive business income.

Question 3Income Tax

An individual aged 75 with only pension income wishes to claim the exemption from filing a return under section 194P. Which condition must be satisfied?

  1. The individual must file a declaration in Form 15H each year
  2. The individual must maintain only one specified bank account with the specified bank Correct answer.
  3. The individual must hold no foreign assets
  4. Interest income must exceed fifty thousand rupees

Explanation

Section 194P relief applies to a resident individual aged 75 or more who has only pension and interest income credited to a single specified bank account with a specified bank. The bank then deducts tax after allowing the section 87A rebate and files the return on the taxpayer's behalf.

Question 4Income Tax

A resident individual receives a gift of INR 75,000 from a friend on the occasion of Diwali. How is it taxed?

  1. Taxable only to the extent it exceeds INR 50,000 Correct answer.
  2. Taxable at a special rate of 10 percent
  3. Taxable as income from other sources in full
  4. Fully exempt as a festival gift

Explanation

Under section 56(2)(x), gifts from non-relatives are taxable only when the aggregate value exceeds INR 50,000 in a year, and then the entire amount is taxed. If the aggregate exceeds the threshold, the whole sum becomes taxable, not merely the excess. Since the aggregate here is INR 75,000, the entire amount is taxable.

Question 5Income Tax

Which of the following best describes the residential status of a company incorporated outside India whose place of effective management during the year is in India?

  1. Resident, because its place of effective management is in India Correct answer.
  2. Non-resident, because it is incorporated abroad
  3. Resident only if it is wholly owned by Indian residents
  4. Non-resident unless it is listed on an Indian exchange

Explanation

Section 6(3) provides that a company is resident in India if it is an Indian company or if its place of effective management in that year is in India. Foreign incorporation does not by itself make the company non-resident.

Question 6Income Tax

An individual earns interest of INR 12,000 on a savings bank account and INR 40,000 on a fixed deposit. Which deduction under section 80TTA is available to a non-senior individual?

  1. INR 12,000
  2. INR 10,000 Correct answer.
  3. INR 52,000
  4. INR 40,000

Explanation

Section 80TTA allows a deduction up to INR 10,000 for interest on savings bank deposits, but not for fixed deposit interest. Since savings interest is INR 12,000, the deduction is capped at INR 10,000.

Question 7Income Tax

Which income is taxed on a receipt basis for a resident assessee under the Income Tax Act, 1961?

  1. Dividend Correct answer.
  2. Interest on securities
  3. Salary
  4. Business profits

Explanation

Dividend income is taxable in the year of receipt under section 8 read with the relevant provisions, regardless of the year to which it relates. Salary is taxed on due or receipt basis, whichever is earlier, and business profits on accrual.

Question 8Income Tax

A taxpayer sells listed equity shares held for 14 months. What is the nature and rate of tax on the resulting gain, assuming securities transaction tax was paid?

  1. Short-term capital gain taxed at 20 percent
  2. Business income taxed at slab rates
  3. Long-term capital gain taxed at 12.5 percent without indexation Correct answer.
  4. Long-term capital gain taxed at 10 percent with indexation

Explanation

Listed equity shares held for more than 12 months qualify as long-term capital assets. Under the current regime, long-term capital gains on listed equity are taxed at 12.5 percent without indexation (with the annual exemption under section 112A).

Question 9Income Tax

What is the maximum deduction available under section 80C for an individual for a year?

  1. INR 1,00,000
  2. INR 2,50,000
  3. INR 1,50,000 Correct answer.
  4. INR 2,00,000

Explanation

Section 80C permits a deduction of up to INR 1,50,000 in aggregate for specified investments and payments such as life insurance premiums, PPF and principal repayment of housing loans. The ceiling applies to the combined total across all eligible items.

Question 10Income Tax

An assessee pays INR 30,000 as mediclaim premium for self (age 40) and INR 40,000 for parents aged 70. What is the total deduction under section 80D?

  1. INR 70,000
  2. INR 55,000 Correct answer.
  3. INR 50,000
  4. INR 65,000

Explanation

Under section 80D, the limit is INR 25,000 for self and family below 60, and INR 50,000 for senior-citizen parents. The self premium is capped at INR 25,000, and the parental premium is allowed up to INR 50,000, giving INR 55,000.

Question 11Income Tax

Which authority is empowered to grant an exemption under section 10(23C) to a university existing solely for educational purposes?

  1. Principal Commissioner of Income-tax
  2. Central Board of Direct Taxes
  3. Central Government Correct answer.
  4. Assessing Officer

Explanation

Under section 10(23C)(vi), a university or educational institution existing solely for educational purposes may be approved by the Central Government where aggregate receipts exceed the prescribed threshold. The Central Board of Direct Taxes handles certain other categories.

Question 12Income Tax

An individual with total income of INR 6,00,000 under the new tax regime claims the section 87A rebate. What is the tax payable after rebate?

  1. INR 22,500
  2. INR 15,000
  3. Zero Correct answer.
  4. INR 12,500

Explanation

Under the new regime, section 87A provides a rebate up to INR 25,000 where total income does not exceed INR 7,00,000. Since total income is INR 6,00,000, the tax is fully offset and nothing is payable.

Question 13Income Tax

Which of the following is a capital receipt not chargeable to tax under the Income Tax Act, 1961?

  1. Amount received on sale of a plot of land
  2. Amount received as a loan from a bank Correct answer.
  3. Compensation received for surrender of tenancy rights
  4. Gift of INR 1,00,000 from a non-relative

Explanation

A loan received is a capital receipt that creates a liability and is not income, so it is outside the charging provisions. Sale proceeds of land and compensation for surrender of tenancy rights may generate capital gains or income, and gifts from non-relatives above the threshold are taxable.

Question 14Income Tax

A resident individual pays rent of INR 25,000 per month and receives HRA of INR 10,000 per month. Which element determines the exempt portion of HRA?

  1. Rent paid minus 10 percent of salary, subject to the least of three tests Correct answer.
  2. 50 percent of salary in all cases
  3. Actual HRA received only
  4. The entire rent paid, with no conditions

Explanation

The HRA exemption under section 10(13A) is the least of the actual HRA received, rent paid minus 10 percent of salary, and 50 percent (metro) or 40 percent (non-metro) of salary. The exemption is not based on any single element alone.

Question 15Income Tax

Which of the following incomes is not included in the scope of total income of a non-resident under section 5(2)?

  1. Income from a business controlled from India
  2. Income accruing and received outside India from a foreign business Correct answer.
  3. Income received in India
  4. Income accruing in India

Explanation

Section 5(2) taxes a non-resident on income received or accruing in India and on foreign income from a business controlled or profession set up in India. Income accruing and received abroad from a foreign business falls outside this scope.

Question 16Income Tax

Under section 44AD, what is the presumptive rate of profit for a business with turnover below the threshold where receipts are through prescribed electronic modes?

  1. 10 percent
  2. 50 percent
  3. 6 percent Correct answer.
  4. 8 percent

Explanation

Section 44AD presumes profit at 8 percent of turnover, reduced to 6 percent for receipts through prescribed electronic modes such as account payee cheques or digital payments. The concessional rate encourages banking-channel receipts.

Question 17Income Tax

A taxpayer has a brought-forward business loss of INR 2,00,000 from a business that was discontinued two years ago. Against which income can it be set off now?

  1. Capital gains on shares
  2. Income from house property
  3. Salary income
  4. Business income Correct answer.

Explanation

Business losses can be carried forward only if the business is continued, and they may be set off only against business income. Since the business was discontinued, the loss lapses and cannot be set off against any head. Among the options, only business income would even theoretically qualify.

Question 18Income Tax

Which of the following is a condition for claiming deduction of interest on a housing loan under section 24(b) for a self-occupied property?

  1. The loan must be taken for purchase, construction, repair or renewal Correct answer.
  2. The property must be let out throughout the year
  3. The loan must be from a bank only
  4. The loan must be repaid within five years

Explanation

Section 24(b) allows interest deduction where the capital was borrowed for acquiring, constructing, repairing, renewing or reconstructing the property. The lender need not be a bank, and the property may be self-occupied.

Question 19Income Tax

An Indian company declares a dividend of INR 5,00,000 to a resident shareholder. Which statement about tax is correct?

  1. The company deducts tax at 10 percent under section 194
  2. The shareholder pays tax at slab rates and the company deducts no tax Correct answer.
  3. The dividend is exempt in the shareholder's hands
  4. The company pays dividend distribution tax

Explanation

After the abolition of dividend distribution tax, dividends are taxable in the shareholder's hands at applicable slab rates. Section 194 applies only where the dividend paid to a resident shareholder exceeds INR 5,000 in a year; here it equals INR 5,000, so the threshold is not crossed.

Question 20Income Tax

What is the maximum deduction available under section 80DDB for treatment of a specified disease for a senior citizen patient?

  1. INR 1,50,000
  2. INR 1,00,000 Correct answer.
  3. INR 40,000
  4. INR 75,000

Explanation

Section 80DDB allows a deduction of up to INR 1,00,000 for a senior citizen suffering from a specified disease, and INR 40,000 for others. The deduction requires a prescription from a specialist and is reduced by any reimbursement received.

Question 21Income Tax

An assessee has long-term capital gains of INR 3,00,000 from sale of listed shares and invests INR 2,00,000 in eligible bonds under section 54EC. What is the taxable amount?

  1. INR 1,00,000 Correct answer.
  2. Nil
  3. INR 2,00,000
  4. INR 3,00,000

Explanation

Section 54EC allows exemption of the amount invested in specified bonds, subject to a cap of INR 50 lakh, against long-term capital gains from land, building or specified assets. The investment of INR 2,00,000 reduces the gain of INR 3,00,000 to INR 1,00,000.

Question 22Income Tax

Which of the following incomes is taxable under the head 'Income from Other Sources'?

  1. Salary arrears
  2. Profit from sale of shares held as stock-in-trade
  3. Winnings from a lottery Correct answer.
  4. Rent from a let-out commercial property

Explanation

Winnings from lotteries, crossword puzzles and similar games are taxed under section 56(2)(ib) as income from other sources at a flat rate. Rental income falls under house property, trading profits under business, and salary arrears under salary.

Question 23Income Tax

An individual's total income includes long-term capital gains of INR 1,50,000 on listed equity. What exemption threshold applies under section 112A?

  1. INR 1,25,000 Correct answer.
  2. INR 1,00,000
  3. No exemption
  4. INR 1,50,000

Explanation

Section 112A exempts long-term capital gains on listed equity up to INR 1,25,000 in a year, with the balance taxed at 12.5 percent. The threshold applies to the aggregate of such gains, not to each transaction.

Question 24Income Tax

Which of the following persons is required to obtain a tax deduction account number (TAN)?

  1. A student receiving a scholarship
  2. A salaried employee receiving salary
  3. A firm deducting tax at source on contractor payments Correct answer.
  4. An individual paying salary to a domestic servant

Explanation

Any person liable to deduct tax at source under Chapter XVII-B must obtain TAN, including a firm deducting tax on contractor payments under section 194C. Individuals paying wages to domestic servants are outside the TDS provisions, and recipients of salary or scholarships are not deductors.

Question 25Income Tax

Under section 139(1), by what date must a non-audit individual taxpayer file the return of income for assessment year 2024-25?

  1. 31 December 2024
  2. 31 October 2024
  3. 31 July 2024 Correct answer.
  4. 30 September 2024

Explanation

The due date under section 139(1) for individuals not subject to audit is 31 July of the assessment year, so for AY 2024-25 it is 31 July 2024. The later dates apply to audited cases and belated returns.

Question 26Income Tax

Under the Income Tax Act, 1961, what is the basic exemption limit for an individual resident below 60 years of age who opts for the default tax regime for assessment year 2025-26?

  1. INR 2,50,000
  2. INR 7,00,000
  3. INR 5,00,000
  4. INR 3,00,000 Correct answer.

Explanation

Under the default regime introduced by the Finance Act, 2023, the basic exemption limit for an individual below 60 is INR 3,00,000, with the section 87A rebate applying up to INR 7,00,000 of total income. The old regime retains a limit of INR 2,50,000 for this category.

Question 27Income Tax

A resident individual aged 45 has total income of INR 9,00,000 under the default tax regime. What tax is payable after the section 87A rebate?

  1. INR 30,000
  2. INR 45,000
  3. Nil
  4. INR 37,500 Correct answer.

Explanation

Under the default regime, tax on INR 9,00,000 is INR 30,000 (3,00,000 to 7,00,000 at 5%) plus INR 15,000 (7,00,000 to 9,00,000 at 10%), giving INR 45,000. The marginal relief provision caps the tax at the income exceeding INR 7,00,000, so tax equals INR 2,00,000 minus rebate already exhausted, effectively INR 37,500 after the standard marginal relief computation.

Question 28Income Tax

Which income is deemed to accrue or arise in India under section 9 for a non-resident?

  1. Royalty payable by a resident for use of a patent in India Correct answer.
  2. Interest paid by a resident on a loan used outside India
  3. Salary for services rendered wholly outside India
  4. Dividend declared by a foreign company with no Indian operations

Explanation

Section 9 deems income to accrue in India where it arises through a business connection, property, a source of income in India, or transfer of an Indian capital asset. Royalty for a patent used in India falls within this deeming scope.

Question 29Income Tax

A company pays INR 80,000 as rent for an office to a resident landlord in a financial year. What is the tax deduction obligation?

  1. Deduct tax at 10% only on the amount exceeding INR 20,000
  2. Deduct tax at 10% under section 194-I on the full amount Correct answer.
  3. No deduction since the amount is below INR 1,00,000
  4. Deduct tax at 2% under section 194-I on the full amount

Explanation

Section 194-I requires a tenant to deduct tax at 10% on rent paid to a resident where the annual rent exceeds INR 2,40,000. Since INR 80,000 is below that threshold, no deduction arises, but the rate for rent of land or building is 10% when applicable.

Question 30Income Tax

Which of the following is a condition for a payment to be allowed as a deduction under section 37(1)?

  1. The expenditure must be incurred wholly and exclusively for the business Correct answer.
  2. The expenditure must relate to personal expenses of the proprietor
  3. The expenditure must be prohibited by law
  4. The expenditure must be of a capital nature

Explanation

Section 37(1) permits deduction of any expenditure laid out wholly and exclusively for the purposes of the business or profession, provided it is not capital, personal, or prohibited by law. The expenditure must also not be covered by sections 30 to 36.

Question 31Income Tax

An assessee has a short-term capital loss of INR 50,000 from listed shares and a long-term capital gain of INR 1,20,000 from sale of land. What is the net capital gain chargeable?

  1. Nil
  2. INR 70,000 long-term capital gain Correct answer.
  3. INR 1,20,000 long-term capital gain
  4. INR 50,000 short-term capital gain

Explanation

Under section 74, a short-term capital loss may be set off against any capital gain, whether short-term or long-term, in the same year. The long-term gain of INR 1,20,000 is therefore reduced by the short-term loss of INR 50,000, leaving INR 70,000 taxable as long-term capital gain.

Question 32Income Tax

Under section 54, an individual sells a residential house and invests the capital gain in another residential house. What is the time limit for purchasing the new house?

  1. Within six months after the transfer
  2. Within five years after the transfer
  3. Within one year before or two years after the transfer Correct answer.
  4. Within three years after the transfer

Explanation

Section 54 grants exemption where the capital gain is invested in purchasing one residential house in India within one year before or two years after the date of transfer, or in constructing one within three years. These timelines are statutory conditions for the exemption.

Question 33Income Tax

A firm's total income includes a speculation profit of INR 3,00,000 and a non-speculation business loss of INR 2,00,000. How is the loss set off?

  1. Against the speculation profit only after four years
  2. Carried forward only against future speculation profits
  3. Against the speculation profit of INR 3,00,000
  4. Against any head of income other than salary Correct answer.

Explanation

A speculation loss can be set off only against speculation profits, but a non-speculation business loss may be set off against any business income, including speculation profit, in the same year. The loss is therefore adjusted against the speculation profit before carry-forward arises.

Question 34Income Tax

Which of the following is a capital receipt that is chargeable to tax?

  1. Amount received under a life insurance policy on maturity
  2. Loan received from a bank
  3. Gift received from an unrelated person exceeding INR 50,000
  4. Compensation received on compulsory acquisition of land Correct answer.

Explanation

Compensation on compulsory acquisition of a capital asset is a capital receipt, but it is chargeable as capital gains under section 45(1) read with the transfer provisions. Other capital receipts such as policy maturity proceeds or loans are generally not chargeable.

Question 35Income Tax

What is the maximum deduction available to an individual under section 80TTA for interest on a savings bank account?

  1. INR 1,50,000
  2. INR 50,000
  3. INR 40,000
  4. INR 10,000 Correct answer.

Explanation

Section 80TTA allows a resident individual or Hindu undivided family a deduction of up to INR 10,000 on interest from savings accounts with banks, cooperative societies, or post offices. The deduction applies only to savings account interest, not to fixed deposits.

Question 36Income Tax

A resident individual receives a gift of INR 75,000 in cash from a friend who is not a relative. What is the tax treatment?

  1. Fully exempt as a gift
  2. Taxable on INR 25,000
  3. Taxable only if the friend is a specified relative
  4. Taxable on the full INR 75,000 Correct answer.

Explanation

Under section 56(2)(x), a gift of money from a person who is not a relative is taxable in full as income from other sources once the aggregate value in the year exceeds INR 50,000. The entire amount is taxed, not merely the excess over the threshold.

Question 37Income Tax

Which income is taxed under the head 'Profits and gains of business or profession'?

  1. Dividend from mutual funds
  2. Rent from a let-out commercial property
  3. Profit from sale of shares held as stock-in-trade Correct answer.
  4. Interest on a fixed deposit

Explanation

Where shares are held as stock-in-trade, the profit on their sale is business income because the activity constitutes a trade. Interest and dividend income are generally taxed under other sources, and rental income falls under house property.

Question 38Income Tax

An assessee fails to get accounts audited as required under section 44AB. What penalty may be levied under section 271B?

  1. No penalty if the return is filed late
  2. A fixed penalty of INR 10,000
  3. 100% of the tax evaded
  4. 0.5% of turnover, subject to a maximum of INR 1,50,000 Correct answer.

Explanation

Section 271B provides a penalty of 0.5% of the total sales, turnover, or gross receipts, capped at INR 1,50,000, for failure to obtain the tax audit report. The penalty is discretionary and may be waived where reasonable cause is shown under section 273B.

Question 39Income Tax

A resident individual's total income includes agricultural income of INR 1,50,000 and non-agricultural income of INR 6,00,000. Is partial integration applicable?

  1. No, because agricultural income is below INR 5,000
  2. Yes, because agricultural income exceeds INR 5,000 and non-agricultural income exceeds the exemption limit Correct answer.
  3. No, because agricultural income is fully exempt in every case
  4. Yes, because all agricultural income is always aggregated

Explanation

Partial integration under the Finance Act applies where agricultural income exceeds INR 5,000 and non-agricultural income exceeds the basic exemption limit. Both conditions are satisfied here, so tax is computed on aggregated income with a deduction for tax on agricultural income plus exemption limit.

Question 40Income Tax

What is the rate of tax on long-term capital gains from transfer of listed equity shares where securities transaction tax has been paid?

  1. 10% without indexation
  2. 12.5% without indexation Correct answer.
  3. 30% as normal income
  4. 20% with indexation

Explanation

Section 112A taxes long-term capital gains on listed equity shares and units of equity-oriented funds at 12.5% without indexation, after the Finance (No. 2) Act, 2024 amendment. The first INR 1,25,000 of such gains in a year is exempt.

Question 41Income Tax

A resident individual pays a premium of INR 25,000 under a pension plan of an insurer. What is the maximum deduction under section 80CCC?

  1. INR 1,00,000
  2. INR 50,000
  3. INR 25,000 subject to the overall section 80CCE limit Correct answer.
  4. INR 10,000

Explanation

Section 80CCC allows a deduction for contributions to pension plans up to INR 1,50,000, but this is subject to the combined ceiling of INR 1,50,000 under section 80CCE along with sections 80C and 80CCD(1). The premium actually paid, INR 25,000, is therefore deductible within that limit.

Question 42Income Tax

Which authority administers the Income Tax Act, 1961 at the apex level?

  1. Central Board of Direct Taxes Correct answer.
  2. Securities and Exchange Board of India
  3. Reserve Bank of India
  4. Comptroller and Auditor General of India

Explanation

The Central Board of Direct Taxes, constituted under the Central Boards of Revenue Act, exercises administrative control over direct tax matters and frames policy for the Income Tax Department. It functions under the Ministry of Finance.

Question 43Income Tax

A taxpayer sells a plot of land held for 30 months. What is the nature of the resulting gain?

  1. Long-term capital gain Correct answer.
  2. Exempt income
  3. Business income
  4. Short-term capital gain

Explanation

For immovable property such as land, the holding period for long-term treatment is more than 24 months. A holding period of 30 months therefore exceeds the threshold, and the gain is long-term capital gain.

Question 44Income Tax

Under section 139(4), by what date may a belated return of income be filed for assessment year 2025-26 for a non-audit individual?

  1. 31 December 2025 Correct answer.
  2. 31 March 2027
  3. 31 July 2025
  4. 31 March 2026

Explanation

A belated return under section 139(4) may be filed at any time before three months prior to the end of the relevant assessment year, or before completion of assessment, whichever is earlier. For assessment year 2025-26, this translates to 31 December 2025.

Question 45Income Tax

What is the standard deduction available to a salaried individual under the default tax regime for assessment year 2025-26?

  1. INR 75,000 Correct answer.
  2. Nil
  3. INR 40,000
  4. INR 50,000

Explanation

The standard deduction under section 16(ia) was raised to INR 75,000 under the default regime by the Finance (No. 2) Act, 2024. The old regime retains a deduction of INR 50,000 for salary income.

Question 46Income Tax

An assessee earns INR 2,00,000 from letting out machinery along with a factory building where the letting is inseparable. How is the income taxed?

  1. Partly as house property and partly as other sources
  2. Entirely as business income Correct answer.
  3. Entirely as other sources income
  4. Entirely as house property income

Explanation

Where a building is let out together with plant and machinery as an inseparable composite letting, the income cannot be computed under house property. It is treated as business income where the letting constitutes a business, or otherwise as income from other sources depending on the facts.

Question 47Income Tax

What is the due date for filing the return of income for a company whose accounts are required to be audited for assessment year 2025-26?

  1. 31 July 2025
  2. 30 September 2025
  3. 30 November 2025
  4. 31 October 2025 Correct answer.

Explanation

Under section 139(1), a company or a taxpayer whose accounts must be audited must furnish the return by 31 October of the assessment year. The date may be extended by the Central Board of Direct Taxes by notification.

Question 48Income Tax

A taxpayer claims depreciation on a car used partly for personal purposes. How is depreciation allowed?

  1. Not allowed at all
  2. On the full cost of the car
  3. At double the normal rate
  4. Only on the proportion used for business Correct answer.

Explanation

Section 32 allows depreciation only on assets used for the purposes of the business or profession. Where an asset is used partly for personal purposes, depreciation is restricted to the business-use proportion.

Question 49Income Tax

Which of the following is not a condition for claiming deduction of interest on a loan taken for higher education under section 80E?

  1. The loan must be taken for the taxpayer, spouse, or children
  2. The deduction is capped at INR 1,50,000 per year Correct answer.
  3. The deduction is available for a maximum of eight assessment years
  4. The loan must be taken from a financial institution or approved charitable institution

Explanation

Section 80E allows deduction of the entire interest paid on an education loan for up to eight assessment years, without any monetary ceiling. The loan must be from a financial institution or approved charitable institution and relate to the specified persons.

Question 50Income Tax

What is the rate of tax deducted at source on a payment of INR 60,000 as professional fees to a resident under section 194J?

  1. 2%
  2. 20%
  3. 1%
  4. 10% Correct answer.

Explanation

Section 194J requires deduction at 10% on fees for professional or technical services paid to a resident, once the annual threshold of INR 50,000 is crossed. The payment of INR 60,000 therefore attracts deduction at 10%.