winnings from horse races

This query is : Resolved

rashmi (Querist)
Follow

08 October 2007 If we get winnings from horse races of Rs.20000 how is the tax calculation done? I know exemption is not available. I just wanted to clarify abt the TDS limit of Rs.2500. Is it just for deciding whether TDS is to be deducted or do we calculate TDS on Rs. 20000 after deducting Rs.2500?
Please solve this problem for me.....

Anand

Anand (Expert)
Follow

09 October 2007 The limit is only for TDS liability.
While computing your total inocme you have to calculate the tax on the total amount without deducting 2500.

Ravikumar.G

Ravikumar.G (Expert)
Follow

09 October 2007 Horse Race Income = Rs.2500 + {(Net Income - Rs.2500) * 100 / (100% - TDS Rate)}.

Upgrade to CAclubindia Pro. Subscribe Now!

rashmi

rashmi (Querist)
Follow

09 October 2007 thnks for yr reply. so this means that at the year end in the COMPUTATION OF INCOME we will take the total amount of winnings and while calculating TDS we wil deduct 2500 and on the balance amount TDS wil be calculated.

Is my understanding correct?

R.V.RAO

R.V.RAO (Expert)
Follow

10 October 2007 194BB(WINNINGS FROM HORSE RACES) SAYS TDS CAN BE MADE ONLY WHERE THE WINNINGS FROM HORSE RACES EXCEED RS. 2500.BUT TDS WILL BE MADE ON ENTIRE WINNING AMOUNT. NO BASIC EXEMPTION OF RS. 2500 AS DEDUCTION IS ALLOWED .
BUT THE WINNINGS ARE TO BE PAID TO YOU BY A BOOKMAKER OR LICENCE HOLDER FOR RACE COURSE.
IF RECEIPEINT IS A NON DOMESTIC COMPANY TDS RATE IS 30.9%(IF PAYMENT SUBJECT TO TDS IS BELOW RS. ONE CRORE ).FOR ABOVE ONE CRORE PAYMENT TO SAME CATEGORY THE TDS RATE IS 31.6725%.
FOR OTHER CATEGORIES IT VARIES BETWEEN 30.9% TO 33.99%
R.V.RAO

Ravikumar.G

Ravikumar.G (Expert)
Follow

11 October 2007 Thanks for your information Mr.RAO Sir