26 April 2009
hii.. can u please tell me abt the tax liabilty on prize won by ppl in these reality shows... how is it taxed?? the prize consists of cash prize as well as immovable property (a flat or villa)... the registration copy of the said property is wat is being handed over to the winner.. who pays the tax on this? does the registration copy have any relevance in this context?
26 April 2009
The Prize money won is taxable in the hands of the assessee as other income and is taxable at the normal rat of tax. The tax is ultimately is payable by the winner of the prize, however every payer has to ensure that the tax amount is paid before releasing the gift amount / article . He is liable to to withhold tax @ 40% + applicable surcharge from the prize money / value of gifted article. If the payer of the prize money takes the responsibility to bear the tax amount, he has to gross the amount and pay taxes to Govt.
CAclubindia
