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Advance tax payment

26 October 2019

Mr A aged 59 years won Rs 60 lakh and Mr B aged 50 years won Rs 8 lakh from lotteries. TDS u/s 194B was duly deducted. Assuming that this is the only source of income of Mr. A and Mr. B for AY 19-20 are Mr. A and Mr. B liable to pay advance ta, for that year?

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6 Replies

rama krishnan (12244 Points)
Replied 26 October 2019

Under 194B tax will be deducted at 30%. so if it's the only source of income, there won't be any liability for either A or B to pay advance tax since entire tax has been already deducted

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Kapadia Pravin (17264 Points)
Replied 26 October 2019

Advance tax is paid on estimated tax liability as reduced by TDS, TCS in 4 instalments.
but here full tax will be deducted under TDS and hence Advance tax payment will be Nil
I think this is a repeat query with changed figures of lottery amounts.

om akhani (88 Points)
Replied 26 October 2019

Assuming this is only one source of income,
Mr.A would be liable to pay Advance tax because of the cess applicable 4% so his liability of advance tax would be 4% of 18Lakh(i.e.More than 10000)
Mr.B would not be liable for Advance tax as thier liability of tax after TDS is 9600(4% of 30% of 8Lakh)(Less than 10k)

4 Like

Kapadia Pravin (17264 Points)
Replied 26 October 2019

TDS Applicability

If the Prize money exceeds Rs 10,000, then the winner will receive the prize money after the deduction of TDS @ 31.2% u/s 194B.
It does not matter whether the income of the winner is taxable or not.
The prize distributor is liable to deduct tax at the time of payment.
In the case of winnings from horse races, TDS will be applicable if the amount exceeds Rs 10,000.

full tax will be deducted under TDS and hence no question of Advance tax payment which will be nil

1 Like

Rijo John (audit manager) (447 Points)
Replied 28 October 2019

Normaly 30% deduct as tds in the case of prize money. So you are liable to pay 4% cess at the time of file return. If cess exceeds 10000 you can pay it as advance tax to avoid 234b and 234 c interest.