praveen
(Chartered Accountant)
(6971 Points)
Replied 14 October 2009
yes winnings in both kind or cash will be subject to tax @ 30%
Sunil
(Trader)
(2611 Points)
Replied 14 October 2009
If it is in kind, prize will be handed over only on satisfaction of income tax dues by the recepient without any exemption. Full 30% + cess etc. Therefore do not go overboard if you win any prize in some Television Game show. First of all an overpriced value like a printed MRP will be considered for payment of taxes. It is always a raw deal. Normally following problems occur:-
The biggest problem is you never get a sealed packed piece of the gift item. It could be used, maybe as a demo piece. If it is a car it could be used with temporary number plate, meter reset to zero, polished, cleaned and given to you.
30% tax is as good as 42% of the value of the prize in kind. If over priced value is taken then you may get something with a few months of warranties gone or worst warranties not transferred to second owner as it is valid only for the 1st owner,the organiser.
I suggest not to participate with an intention of winning a prize in kind. It is better to buy the product new with an auto loan or consumer loan and hammer for the maximum discounts possible. Always go for cash prize in lieu of anything in kind.
Sunil Liladhar Kotak
(Manager (F & A))
(2025 Points)
Replied 14 October 2009
The company will give u such a gift after duducting tax i.e. first the company will receive the amount of tax from u & then u will get that vehicle
sunil
CAclubindia
