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Income from owning and maintaining race horses

NIKIT SHETH (Chartered Accountant) (55 Points)

09 December 2010

Income from owning and maintaining race horses is taxable under which head of income and at what rate?

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25 Replies

CA Sahil Singla.. (Service Tax ) (3746 Points)
Replied 09 December 2010

taxable under other sources at 30% + 10 %surcharge +3% CESS if applicable

Paresh Rathod (CA) (222 Points)
Replied 09 December 2010

Sec. 115BB

Winnings from lotteries, crossword puzzles, or race including horse race (not being income from the activity of owning and maintaining race horse) or card game and other game of any sort or from gambling or betting of any form or nature

Taxable at - 30% + 2% Edu. cess + 1% SHEC

1 Like

CA Amit surana (C.A.) (186 Points)
Replied 09 December 2010

TAXABLE UNDER HEAD OTHER SOURCES AT NORMAL SLAB RATE

(Guest)

Taxable under head I.F.O.S. ..

normal tax rate are applied for taxability

1 Like

Max Payne (employed) (2569 Points)
Replied 09 December 2010

Originally posted by : amit surana
	TAXABLE UNDER HEAD OTHER SOURCES AT NORMAL SLAB RATE

Agree - normal slab rate, IFOS - Absolutely.

I think other members have confused themselves with explanation winning from races including horse races, which is covered u/s 115BB

Rajesh (Articled Clerk) (50 Points)
Replied 09 December 2010

I agree with you .G.K.. It is taxable under other sources

Misha (CCI STUDENT.....) (773 Points)
Replied 09 December 2010

Taxable under head other sources at normal slab rate.

(Guest)

It is taxable under PGBP and is taxable at normal slab rate since from last two years i m doing accounting as well as filing return of person who is owning and maintaing race horses in Pune Race Course.

Adityakumarhv (CA Final) (45 Points)
Replied 10 December 2010

I agree with paresh rathod

swati arora (CA & CS student) (83 Points)
Replied 10 December 2010

Taxable under "Income from other source"

Normal slab rate + education cess is applicable.

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 10 December 2010

Income from owning and maintaining race horses is a specific item of income covered by the section 56(2)(ib) of the income tax act. Section 56 tells us the specific type of income which is taxable under the head Income from other source, thus 100% it is taxable under the head of income from other sources. As no special rate prescribed for such income under the income tax act, it would be taxable at the normal rate as per slab rates.

regards,

manoj

CS LLB Pulkit Gupta (https://www.facebook.com/pages/Life-and-Promises/553962034682487) (16631 Points)
Replied 10 December 2010

5 WINNINGS FROM LOTTERY, ETC. – Section 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 or card game and

other game of any sort or from gabling or betting of any form, tax shall be

calculated at the rate of 30% of such income plus surcharge.

The taxability of income in the nature of winnings from any lotteries,

crossword puzzles, race, etc. are subject to the following:

(a) No expenditure or allowance can be allowed against such income;

(b) No deduction under Chapter VI-A can be allowed;

(c) No benefit of carry forward and set off of loss/unabsorbed depreciation

allowance is available against such income; and

(d) No basic exemption limit is available.

This provision does not apply to income derived from owning and maintaining

race horses in respect of which normal rates of tax shall apply. Loss derived from this source shall be governed by the provisions of Section 74A.

Loss from owning and maintenance of horses shall be set-off only out of the income form owning and maintenance of horses. This means that loss from the activity of owning and maintaining race horses cannot be set-off against any other income falling under the head “Other Sources”.