DOUBLE TAXATION

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anand

aaa

26 Points Posted on 23 January 2009

I won prize of US$ 3000 in crossword puzzle. The contest was organised by Robin Sargent Falcon Memorial Trust, Orinda, USA.

I received a Check of US$ 1821 along with a letter in which they stated that for prize winners who are not citizens of USA , they are required to withold 30% of the total prize amt. as U.S federal income tax and california state tax at 9.3% on the total amount.

In this case, as tax has already been deducted in USA, will i be having any benefits on the double taxation treaty between INDIA and USA. and how do i procedurally handle the reporting of prize money and the payment of tax?

please advise

Replies (6)

Rajeev Nair

Finance Professional

285 Points Posted on 23 January 2009

Hi Anand,well it's a question of "RESIDENTIAL STATUS"

However the trust is located & controlled outside India and if i am interpreting this right then

" INCOME EARNED AND RECEIVED OUTSIDE INDIA AND REMITTED TO INDIA " such income is not taxable in India "

Though Section 115BB of the Act. is there which directly attracts flat rate of 30% on winning from lotteries, cross word puzzles, horse race, gambling, betting etc... i believe that your income might not be taxable in India...

Please correct me colleagues if i am wrong...!

anand

aaa

26 Points Posted on 23 January 2009

the residential status is Indian

PiyushAgrawal

Chartered acooutant in practice

418 Points Posted on 23 January 2009

Originally posted by :anand
"	the residential status is Indian	"

If Income Rec. & accrued outside india and latter it remitted to India is not taxable to anyone.

Ashish M

Chartered Accountant

2103 Points Posted on 23 January 2009

THE INCOME IS MERELY REMITTED TO INDIA...........NOT RECIEVED OR DEEMED TO RECIEVED IN INDIA HENCE NOT TAXABLE IN INDIA./..................

Guest

Posted on 24 January 2009

resident s are taxed with global income..........you will be taxable in india also but after considering double taxation agreement between usa and india you will be releived.but firstly uwill be taxed twice

anand

aaa

26 Points Posted on 24 January 2009

I have gone through the double taxation treaty between INDIA and USA and there is nothing specifically mentioned about prize winners or lottery or anything that might be closely related to this case. Though there is something mentioned about atheletes and entertainers but that cannot be applied here. So, as there is nothing mentioned in the DOUBLE TAXATION TREATY, how will it be treated in INDIA.