19 October 2010
IF MR. X WINS RS. 5 CRORES THEN WHAT WILL BE HIS TAX LIABILITY?
TDS WILL BE DEDUCTED U/S 194B @ 30%. WILL HE HAVE TO PAY TAX AGAIN UNDER THE HEAD INCOME FROM OTHER SOURCES @ 30% ON THE REMAINING AMT. IE. AFTER DEDUCTING TDS (5CR - 1.5 CR = 4.5 CR.
19 October 2010
The winnings has to be taxed as per section 115BB(1) read along with explantion (ii) to section 2(24)(ix)of the Income tax Act,1961. From the tax so arrived at, deduction can be claimed on the TDS amount meaning thereby no income tax need to pay again on the money received.
20 October 2010
At the time of return filing, income will be shown under IOS & tax will be computed on such income & other incomes at d rates applicable,
Against such tax, credit will be allowed of earlier TDS
Balance if any will have to be paid
There cannot be charge at 30% again on the net amount received as it will amount to double taxation
20 October 2010
TDS is only a method of collecting the tax payable at source. Since the tax in this case has been deducted and paid to the central Govt. no need to pay further tax. Agreed with other experts
Where the total income of an assessee includes any income by way of winnings from any lottery or crossword puzzle or race including horse race (not being income from the activity of owning and maintaining race horses) or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, the income-tax payable shall be the aggregate of— (i) the amount of income-tax calculated on income by way of winnings from such lottery or crossword puzzle or race including horse race or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, at the rate of [thirty] per cent;
(ii) The amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i).
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