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This query is : Resolved
12 November 2013
hey .. I won bike in lucky draw. .. its FMV = 60000 ... I paid taxes of rs 18000.. my other taxable income is less than rs 100000.. whether I am eligible for refund
12 November 2013
Yes u r eligible for refund. You should file the income tax return showing ur actual income/nil tax and claim TDS credit, which will result in the Income tax refund.
12 November 2013
i have to disagree here. Your taxability shall remain intact on account of income from lottery etc.
Rather you are also supposed to pay Rs 540 as edu cess.
Rather you are also supposed to pay Rs 540 as edu cess.
13 November 2013
Nikhil, here is the question of refund from Income tax department, which will be available as per my above reply. I am not disputing the taxability because such income are liable for TDS u/s. 194BB if exceeds Rs.5,000/-.
Further, Pl note that SC/EC are not applicable on the TDS rates they are always flat as given under respective section. Thus, TDS rate will be 30% only Not 30.90%.
Further, Pl note that SC/EC are not applicable on the TDS rates they are always flat as given under respective section. Thus, TDS rate will be 30% only Not 30.90%.
13 November 2013
In my view TDS will not be refunded even if your income in NIL under this case {194B}...
13 November 2013
Dear Deepak,
Well everybody is entitled to his/her view. Mine is that no tax refund shall be available and the tax liability is Rs 18540.
Well everybody is entitled to his/her view. Mine is that no tax refund shall be available and the tax liability is Rs 18540.
19 November 2013
I appreciate that you are giving the view. But verify the view in light of Income Tax Law as well. Here, i am reproducing section 199 of the Act, which will clarify the whole situation:
Credit for tax deducted.
199. (1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made, or of the owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be.
Pl also refer rule 37BA:
Credit for tax deducted at source for the purposes of section 199.
37BA. (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorised by such authority.
Credit for tax deducted.
199. (1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made, or of the owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be.
Pl also refer rule 37BA:
Credit for tax deducted at source for the purposes of section 199.
37BA. (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorised by such authority.
19 November 2013
Dear Deepak,
How is that relevant here??
How is that relevant here??
19 November 2013
I am not disputing that TDS should not be deducted. It must be deducted. But what about TDS credit..? Whether the person to whom payment was made after deduction of tax out of his money wont be able to take credit against his total tax liability?
u Logically think that if such TDS is deducted on amount payable to individual person who is having income below taxable limit, how the refund wont be available against the NIL Tax liability.
This is the basic part of Computation of Income (You should know it if u have prepared computation, if any) that TDS credit is available as per section 199 r.w.r. 37BA despite the fact whether the income of the assessee is NIl or Rs.100 crore. TDS credit is right of every assessee.
if u are not agree yet with the Law as mentioned above..(1) discuss the same with your seniors Or (2) you are ENTITLED to carry on your approach. Thanks
u Logically think that if such TDS is deducted on amount payable to individual person who is having income below taxable limit, how the refund wont be available against the NIL Tax liability.
This is the basic part of Computation of Income (You should know it if u have prepared computation, if any) that TDS credit is available as per section 199 r.w.r. 37BA despite the fact whether the income of the assessee is NIl or Rs.100 crore. TDS credit is right of every assessee.
if u are not agree yet with the Law as mentioned above..(1) discuss the same with your seniors Or (2) you are ENTITLED to carry on your approach. Thanks
19 November 2013
I suggest you to read the section and rule mentioned above thoroughly and discuss with someone who prepares computation of income and involved in assessment procedure.
I think you are missing the Basic concept what i m trying to make you understand.
I think you are missing the Basic concept what i m trying to make you understand.
19 November 2013
dear Deepak,
the credit is available. Nobody questioned that. However, the tax liability is not nil in the case. That is what we have said. The tax liability shall be Rs 18540, therefore the lucky draw winner shall have to pay additional tax of Rs 540!!
the credit is available. Nobody questioned that. However, the tax liability is not nil in the case. That is what we have said. The tax liability shall be Rs 18540, therefore the lucky draw winner shall have to pay additional tax of Rs 540!!
19 November 2013
Ok let me explain the basic concept. When it comes to winning lotteries/lucky draws, the tax liability is @ 30% irrespective of the total income of the assessee. Thus, even if the overall income is less than the exempted limit, the tax shall be payable on the lucky draw win!!
Therefore, the tax liability shall be there in this case and the TDS shall be adjusted against this liability. Plus, the edu cess shall have to be paid additionally.
We are ourselves applying section 199!!!
Therefore, the tax liability shall be there in this case and the TDS shall be adjusted against this liability. Plus, the edu cess shall have to be paid additionally.
We are ourselves applying section 199!!!
19 November 2013
If this is not clear, why not you run the said computation in a ITR. you will understand..its basic concept!!
19 November 2013
Dear 194B is not a special head of income. it is part of "Income from Other Sources". So the normal principle of computing total income and tax on the same will be applicable.
Ok. give me some time. I will further check it out if anything special about section 194B while computing the income.
Ok. give me some time. I will further check it out if anything special about section 194B while computing the income.
19 November 2013
Dear, 194B is not a special head of income. it is part of "Income from Other Sources". So the normal principle of computing total income and tax on the same will be applicable.
Ok. give me some time. I will further check it out if anything special about section 194B while computing the income.
Ok. give me some time. I will further check it out if anything special about section 194B while computing the income.
19 November 2013
you are mixing TDS provisions with computation provisions. Please refer section 115bb instead of 194B!!!
rather the beauty of this case is that there is not 194B!!!! the winner himself paid taxes!!
rather the beauty of this case is that there is not 194B!!!! the winner himself paid taxes!!
20 November 2013
Yes Agree. Now it is clear that section 115JB is providing the special rate of tax @30% irrespective of the amount of total income.
Now, conclusively the TDS liability of the Winner would be the tax as calculated u/s.194B which will be reduced by the TDS credit as available from TDS certificate.
Accordingly, No further Tax liability and No Refund of Tax.
I also agree to that extent. However, section 115BB says about the tax liability of Winner But it does not say that winner will himself pay the tax and TDS wont be deducted by the giver. If it is so the section 194B will be meaningless. So TDS will be deducted by the payer/giver. No education cess will be applicable as 115BB provides flat rate @30%.
Thanks Nikhil for sharing information and updating about section 115BB.
Now, conclusively the TDS liability of the Winner would be the tax as calculated u/s.194B which will be reduced by the TDS credit as available from TDS certificate.
Accordingly, No further Tax liability and No Refund of Tax.
I also agree to that extent. However, section 115BB says about the tax liability of Winner But it does not say that winner will himself pay the tax and TDS wont be deducted by the giver. If it is so the section 194B will be meaningless. So TDS will be deducted by the payer/giver. No education cess will be applicable as 115BB provides flat rate @30%.
Thanks Nikhil for sharing information and updating about section 115BB.
20 November 2013
Finally, I am agree with the view of Nikhil that No refund will be available to the Winner.
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