115B Query

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This discussion clarifies the taxability of betting winnings under Section 115BB of the Income Tax Act. It addresses whether only the profit from a bet or the total amount received (stake plus profit) is subject to tax. Experts confirm that for income tax purposes, the net winnings, not the gross amount, are generally considered taxable income, even if Tax Deducted at Source (TDS) isn't applied.

Satish Mehra

Satish Mehra (Querist)

08 November 2021 There is a concept of odds in betting. Like if odds are 1.85 so if I bet Rs. 100 I will get Rs. 185. So my profit from bet is Rs. 85. So, my question is, Is Rs. 85 taxable in 115BB or whole amount of Rs. 185 (my bet money Rs. 100 and Rs. 85 profit/income) ?
Rs. 100 is money I already paid tax on when I got it in form of salary, Please enlighten me. Thanks in Advance...

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

08 November 2021 Rs. 85 taxable in 115BB.

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Satish Mehra

Satish Mehra (Querist)

08 November 2021 Its a critical case, would Like to know more experts opinion on this, and thank you sir for answering.

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

09 November 2021 Correct. These betting terms are not defined in IT act.
As per Sec. 115BB ...... Where the total income of an assessee includes any income by way of winnings from any lottery or crossword puzzle or race including horse race (not being income from the activity of owning and maintaining race horses) or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, the income-tax payable shall be the aggregate of—

(i) the amount of income-tax calculated on income by way of winnings from such lottery or crossword puzzle or race including horse race or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, at the rate of thirty per cent; and .."
Here if the TDS of 30% is deducted over total prize money of 185, then it will be treated as income for the assessment (and not over Rs. 85/- i.e. profit as usually calculated in business).

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Satish Mehra

Satish Mehra (Querist)

09 November 2021 They are not deducting any TDS at the moment. So it is more of self assessment. So, please re consider and make a fresh opinion keeping in mind the fact that no TDS is being deducted. Thank for replying Sir..

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

10 November 2021 Even though as per betting terms it be favorite or underdog, where the amount bet-ted is at risk, for winning SAID prize money. But for income tax purpose, it is always preferred to be taken as NET AMOUNT of win.

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