Doubt about the income tax - Section 194B

Provisions of TDS applies only on Payer not Payee. So, if TDS has not been deducted, it is not the fault of yours but the organisers. they should have deducted.

Secondly, you can show the income as IFOS in the current FY.

^ BALARAM ROUNIYAR What do you mean my current FY? Do you mean the FY for which I would be filling my taxes next July 2014?

Inome earned in FY 2012-2013

Cheque recieved in FY 2013-2014

Assessment year - 2013-2014 or 2014-2015?

In my view ...

Company has to deduct the TDS while paying the amount at @ 30% (i.e on one Lakh, if it is gross winning).

and the winner has to show in return in the F.Y when he actually receives the payment (bcz it was held that the deductor should deduct TDS not when he declare the prize but when he pays the actual payment).

In this case your total income does not cross the basic slab, hence no tax liability on you. It is part of the duty of Payer to deduct TDS.

Waiting for other views

Hi Deep,

Congratulation for your success. Keep going!!!!!!!!!!!!!

Basically you have three question 

1. Whether you have to pay TDS on Prize money or not?

2. Whether you have to pay tax on this prize money? And if yes then under which head?

3. In which assessment year you can show this income?? 

Ans 1 –Sec 205 of  Income Tax act,1961 “Bar against direct demand on assessee” clearly state that where the payer ,who has deducted tax at source, has not paid tax to the credit of the central government only such payer can be consider as an assessee in default in respect of the amount so deducted and the department cannot recover the amount from the payee. Hence you are not liable for paying any TDS.

Ans 2- Sec 115BB state that total income of the assessee includes any income by way of winning from any 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, tax shall be chargeable u/s 115BB at the flat rate of 30% on such income under the head Income from other sources. Your prize money fall in other game category.So despite of you don’t have any other taxable income you need to pay tax at flat rate of 30%. Keep in mind while showing this income you will neither be allow to claim any deduction u/s80C in respect to this income nor any expenditure related to this income. So you have to straightaway need to pay tax of 30,000/-(1 Lac* 30 %)

Ans3- In respect of Income from other sources Income tax authority has stated that it depends on assessee whether to include such income on cash basis or on mercantile basis. so its up to you if you want to follow mercantile system then show your income in the year in which it occurs and if you want to follow cash system then show in the year of receipt of income.

Ramsai Neelam- Though we dont have income exceeding basic exemption limit still we have to pay tax at flat rate of 30%

Originally posted by : Vap Patel
	Ramsai Neelam- Though we dont have income exceeding basic exemption limit still we have to pay tax at flat rate of 30%

Agreed....

Thanks for the reply. But how can "Business Plan competition" meant for promoting entrepreneurship be interpreted into "Other games" category?

Another thing had the source had applied TDS to the prize money then wouldn't the section 115BB be double taxing me?

First of all you are not liable to pay/ deduct the TDS , Seconcd if the payer will not deduct the TDS then he will be the assesee in default when you will not incude the income in your return.

You will include the income in income from the other sources, and file the return on the accrual basis 

you need to pay the taxes on this income earned through this competetion 

Hello frnds...

my opinion is

I. Tax has not been deducted by organiser, so not paid to CG .   organiser - assessee in default.

     prize receiver has to pay tax at 30% flat rate on prize money.

II. Tax has been deducted by organiser but not paid to CG . organiser - assessee in default.

    prize receiver is not liable. such income does not form part of income, need not pay any tax, bcoz if pays it will lead to   double   taxation.

i dont think that income from "other game" will not be included in GTI.

comments pls......

HI 

THIS IS TAXABLE UNDER THE INCOME OF OTHER SOURSES AND PLEASE VERIFE PLEASE THAT AMOUNT U RECEIVED NET AMOUNT MEANS ATFER TDS OR GROSS WITHOUT TDS. 

ACCOURDING TO MY VIEW THAT ALL THESE ARE UNORGANIZED  FIRM SO YOU SHOULD PAY TAX .

IN THE PY 2013-14

There is no question of double taxation. Normally payer deducted tax from prize money and deposit to government account then he will issue TDS certificate to payee. Now payee will show this income in his income tax return and he will show Tax payable on this income @ 30%. With this return payee will furnished TDS detail based on the certificate given by the payer. Based on this certificate government will allow TDS credit to the payee so that payee can adjust this credit against tax payable shown by him. In your case since payer has not paid any TDS so payee will not get any credit and payee has to pay tax @ 30%

Income Tax department has given explanation on “Card game and any other game of any sort” which includes any game show, entertainment programme on television or electronic mode in which people compete to win prize or any other similar game.

So basically it include all those game which include competition in which motive of participant is to compete with other participant and win the prize money.

There is no question of double taxation. Normally payer deducted tax from prize money and deposit to government account then he will issue TDS certificate to payee. Now payee will show this income in his income tax return and he will show Tax payable on this income @ 30%. With this return payee will furnished TDS detail from the certificate given by the payer. Based on this certificate government will allow TDS credit to the payee so that payee can adjust this credit against tax payable shown by him. In your case since payer has not paid any TDS so payee will not get any credit and payee has to pay tax @ 30%

Income Tax department has given explanation on “Card game and any other game of any sort” which includes any game show, entertainment programme on television or electronic mode in which people compete to win prize or any other similar game.

So basically it include all those game which include competition in which motive of participant is to compete with other participant and win the prize money.

Fully agreed with CA Vap Patel's reply.