A Money Prize (Rs. 100000) received by a Student cleared CA final is Taxable or Not, he does not have any other income, is it considered as a gift and charged a flat 30% tax rate ?
15 Replies
SHASHANK AGARWAL
(self employed)
(114 Points)
Replied 04 March 2014
It is a income from winning from lottery, gift etc and hence straightaway taxable @ 30% without taking benefit of Slab Limites applicable to an individual.
https://knowyourtaxation.blogspot.in/
Sanjay Suresh
(Student)
(98 Points)
Replied 04 March 2014
i dont think it will come under winnings from lottery or horse race or anything... receiving gifts from a nonrelative of more than rs 50000 is taxable. so i think this amount should also be considered taxable to the assessee
Ishika
(ca final)
(250 Points)
Replied 04 March 2014
what will be the result if the money prize is less then Rs 50000, whether there is 30% tax rate or no tax
Manoj Mehta
(Head Of Department (Accounts & Finance))
(1479 Points)
Replied 04 March 2014
Dear
You can deal with this problem better by refering you 26AS. if ICAI has deducted your TDS under winning from lottery than consider it as the same and claim refund of the tax amount deducted as you have income below 2 lakh.
Otherwise you can show it as other income and then also it will not be taxable as your total income does not exceed rs. 2 lakh.
Therefore i suggest you to consider your 26AS before classifing the amount.
Sanjay Suresh
(Student)
(98 Points)
Replied 04 March 2014
any cash gifts(including gifts received by cheque or draft) in excess of rs 50000 is taxable. So an amount received under 50000 would not be liable for tax. but if the money was received from a relative, then it is exempt(no matter what amount).
Ishika
(ca final)
(250 Points)
Replied 04 March 2014
thank you, means finally it will not be taxable
Sanjay Suresh
(Student)
(98 Points)
Replied 04 March 2014
Mr. Manoj. If TDS has not been deducted by ICAI as winnings from lotteries, would the person still be liable to file form 26AS?
Manoj Mehta
(Head Of Department (Accounts & Finance))
(1479 Points)
Replied 04 March 2014
Dear,
You must alway consider the slab rate
becouse wen you will file your IT return it will show you below taxable limit and hence there will be no tax payable on you.
Sanjay Suresh
(Student)
(98 Points)
Replied 04 March 2014
@ New Article, I meant that it will finally be fully taxable because it is an amount in excess of the basic limit of amounts receivable as gift.
Sanjay Suresh
(Student)
(98 Points)
Replied 04 March 2014
yes. it is included in the total income and taxable only if it exceeds basic slab rate. Does the student have any other income?
Manoj Mehta
(Head Of Department (Accounts & Finance))
(1479 Points)
Replied 04 March 2014
Dear Sanjay
Firstly 26AS is not a form.
It is a statment of your TDS deduction and Advance tax payments.
If a person deduct your TDS and deposit the same than you can check it on your 26AS ( it is available on the income tax site by creating your PAN login ID)
Secondlly as per income tax act this is the liablility of ICAI to deduct the TDS amount and deposit the same to goverment. If they do not consider the same then there can be legal proceeding on them
Manoj Mehta
(Head Of Department (Accounts & Finance))
(1479 Points)
Replied 04 March 2014
Dear Sanjay
This is not a case of Gift. Scholarship, prize and awards cant be define as gift.
SHASHANK AGARWAL
(self employed)
(114 Points)
Replied 04 March 2014
It is not a GIFT but a PRIZE, therefore i guess section 115BB is applicable and not section 56(2)(vii)
CA PANKAJ
(business consultant)
(288 Points)
Replied 04 March 2014
Taxability arises as gift provided not received from a relative.
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