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Section 40(a)(ia) disallowance for non-TDS on resident payments is:
A50% of expenditure
B100% of expenditure
C30% of expenditure
DTwice the TDS
Answer & Solution
Correct answer: C. 30% of expenditure
1. Section 40(a)(ia) disallows 30% of expenditure if TDS not deducted or not paid by return due date.
2. Earlier full amount disallowed; Finance Act 2014 reduced to 30%.
3. If TDS paid in later year, disallowed amount is allowed in that year.
_Source: ICAI BoS CA Final Paper 7, Ch 3 "Profits and Gains of Business or Profession"_
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