Question

ABC Ltd., issued 2,000, 10% debentures of Rs 100 each on January 01, 2014 at a discount of 10% redeemable at a premium of 10%. Calculate Debenture Interest and TDS for the period ending December 31, 2014 assuming that interest was paid half yearly on June 30 and December 31 and tax deducted at source is 10%. A Ltd., follows calendar year as its accounting year

• A. None of these
• B. 14,000
• C. 28,000
• D. 52,000

Answer 1

The correct option is C

28,000

Interest = 2,000 * 100 * 10% * 6/12 = 10,000
TDS = 10% of Interest = 10% of 10,000 = Rs 1,000