Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Tds u/s. 192b

Chandrashekhar Laddha (CA & CS) (98 Points)

24 November 2014

Hello friends,

My company is giving a car in gift (under lottery) costing INR 5 Lacs to a customer.

Customer is ready to reimburse TDS @ 10% and requesting company to pay remaning 20%.

Please guide me how much tax company should pay and @ what amount.

Please provide calculation and logic behind the calculation.

Awaiting for an early reply.

Thanks

Reply
Follow
Share

6 Replies

CA Saloni (Manager-Accounts & GST Consultant) (5124 Points)
Replied 24 November 2014

Your case is covered u/s 194B

Under Section 194B of the Income Tax Act, 30 per cent tax is deducted on any prize money in excess of Rs 10,000 and other winnings from games, lotteries etc. This is deducted at source (TDS). A Three per cent education cess is payable on the tax amount.

if the prizes awarded are in kind, the prize distributor will, before releasing the prize, ensure that tax has been paid in respect of the winnings. It will either recover it from the winner or bear the tax liability itself and deposit TDS.

Upgrade to CAclubindia Pro. Subscribe Now!

Mihir (Wealth Manager) (5293 Points)
Replied 24 November 2014

Yes, Agree with Ms Saloni.

It is an understanding between you and your company who bears the burden of TDS and how much.

1 Like

CA and CMA Ravinder Singh (CA and CMA) (853 Points)
Replied 24 November 2014

It isnt a winning.....its given by company employer to its employee...tds provisions are governed by sec.192b in this case..car given free of cost will be a perquisite in the hands of employee..nd vl form part of salary.. As regards value...i m nt sure..bt i think cost of the car in the hands of company vl b d value of perquisite.....refer perquisite valuation rules of car..