Prakhar Kalani (CA Final Student) (38 Points)
11 February 2013
Are Cash prizes given by coaching classes for securing good marks subject to TDS???
And are these kinds of prizes covered under definition of LOTTERY???? as there is no draw by lot or any contest etc...
CA Ashish Pathak
(Employed at Cipla Ltd.)
(2779 Points)
Replied 11 February 2013
Prakhar Kalani
(CA Final Student)
(38 Points)
Replied 11 February 2013
CA Pratik Sirwani
(Chartered Accountant)
(127 Points)
Replied 11 February 2013
I dnt think prizes awarded by coaching classes to students would be subject to TDS. Also, it cannot be treated as lottery
CA Gaurav Ajit Potdar
(Chartered Accountant)
(846 Points)
Replied 11 February 2013
Under Section 194B of the IT Act , 30 per cent tax is deducted on any PRIZE MONEY in excess of Rs 10,000 and other winnings from games, lotteries etc.
Act says any prize money, hence in my view TDS u/s 194B is applicable.
Kulwant Singh Khalsa
(CA STUDENT)
(105 Points)
Replied 11 February 2013
@ CA Gaurav but Section 194B deals with winning from lottery or crossword puzzle...kindly correct if i'm wrong.
as per my knowledge, tds for the same is not liable....
CA Gaurav Ajit Potdar
(Chartered Accountant)
(846 Points)
Replied 11 February 2013
My friend Kulwant,
Sec 194B says any prize money and other winnings from games, lotteries etc.
Sec 194B donot only deal with lotteries & cross word puzzles.Hence in my view cash prizes given by coaching classes comes under prize money and will attract TDS u/s 194B
CA AYUSH AGRAWAL
(Kolkata-Pune-Mumbai)
(26986 Points)
Replied 12 February 2013
Dear All,
Agreed With Mr. Gaurav.
Winning from lotteries, crossword puzzles, card games and other games of any sort. For this purpose, “Lottery” includes winning from prizes awarded to any person by draw of lots or by cheque in any other manner whatsoever, under any scheme or arrangement by whatever name called. Further the expression “Card game and other game of any sort” includes any game show, any entertainment programme on television r electronic mode in which people complete to win prizes or any other similar game.
Deduction at what time?
Tax is to be deducted at the time of making payment. Thus if the prize is paid in installments, the deduction of tax shall be made at the time of each installment. (However keep in mind that the exemption limit of Rs.10000/- is per winning and not per payment).
Prize in kind :
If the winnings are wholly in kind or partly in kind but the part is cash is not sufficient to meet the TDS liability, the payer shall before releasing the winning, ensure that the tax has been paid by the payee.
CAclubindia
