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lottery income

Sunshine (Helping All) (10575 Points)

11 June 2010

in case a lottery ticket seller has some tickets left with him which he could not sale....he wins a lottery on one of those remaining tickets...will this be treated as business income of the person as selling of lottery tickets is his regular business..... or taxable under IOS with a flat rate?

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28 Replies

Ankit CA and CS (Manager - Accounts) (204 Points)
Replied 11 June 2010

See for disclusure purpose in form it will be shown under business income but will be taxable at flat rate...

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Sunshine (Helping All) (10575 Points)
Replied 11 June 2010

thanx...

(Guest)

@ ankit.I have never read this type of exception...business income is always taxable at slab rate...so, if we are showing it under business head then it should be taxed at slab rate..

Ankit CA and CS (Manager - Accounts) (204 Points)
Replied 11 June 2010

@ Sneha & @ Rohit: i want to correct my self ..... the business here is sale of lottery tickets and not playing lottery... so i think it is income from other sources and will be taxable as usual.....

Sunshine (Helping All) (10575 Points)
Replied 11 June 2010

but this person is winning lottery from the leftover stock of tickets only nd not buying it from outside....so it might be treated as a business income

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Ankit CA and CS (Manager - Accounts) (204 Points)
Replied 11 June 2010

@ sneha i hav studied about dis during mu prep for finals bt i m nt being able to remember properly... i wil gt bak to u on dis query for sure.....

Sunshine (Helping All) (10575 Points)
Replied 11 June 2010

ya..do get back to this plz....my teacher told me its a business income according to some case decision......but i wasnt satisfied myself in this regard...

(Guest)

yaar ur teacher has provide u with the court case decision...wat else u want?? its also seems to be busines inc...so, do blieve ur teacher..he is right..

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 11 June 2010

Hi friends,

The said income of winning from holding of lottery tickets is in the form of adventure in the nature of trade which is as per the income tax law is included as business income.

Regards,

Manoj

shrikant kalyani (CA-Final Student) (60 Points)
Replied 11 June 2010

INTERESTING QUESTION......WAIT....

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CA APARNA PATIL (CHARTERED ACCOUNTANT JAN 2011) (152 Points)
Replied 12 June 2010

This income will be IOS only & beyond doubts, I can say that as the assessee has won a lottery, & nowhere in sec 28 - 44 it is stated that any type of winning from lottery or any such income is Bp income, but it clearly states Income from bp is income earned or loses made from business / venture dealings & left over stock of lottery winning prize has nothing to do with business dealing, Assessee can claim a business stock loss as left over Lotteries after draw are obsolete & non usable/scrap stock so can be w/off in p & L a/c but Winning from lottery in any case is IOS, & cannot be treated as B/P income However in this typical but a good knowledge bank que. I request some qualified & learned members to Pls send a correct ans & also tell me if I am wrong where & technically how i am wrong it will add to my knowledge sir

Sandeep Ladha (N.A) (435 Points)
Replied 12 June 2010

Its a Business Income nd Taxable as in Slab not at Flat rate....

Agree with Rohit....

Sandeep Kumar (learner) (81 Points)
Replied 12 June 2010

It should be taxable under OS & should be taxed at flat rate of 30%, Because any type of lottery winning comes under OS.

Prasanth Nair V (ACA,ACS,CWA Final,Mcom) (557 Points)
Replied 12 June 2010

No, its casual income and will be charged at a flat rate

Here the business of the person is earn profit through the sale of tickets, and not to earn the uncertain income from lottery.So for him also it will be taxable as IOS.