Open Challenge..Solve If You Can..Its Easy

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CA
919 Points Joined June 2009

Cosider the  Following case:

Mr. X came First time to India on 11th April 2011 for three months. Just to enjoy his vacation.

In between that he heard that there is draw on Kingsfisher Products. He buy that product and fortunately after one month winners name were declared and  Mr. X won the first Prize 

He got One Car amounting to Rs. 520000 and cash prize of Rs. 200000

According to the terms of the game Kingfisher can recover any taxes to be payable by winner from the cash prizes to be given to the winner only.

Now Determine the amount of TDS to be deposited by Kingfisher to the Government?

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On 12 June 2011 at 13:58 Report
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CA IN PRACTICE
16719 Points Joined May 2011
tds should be deducted on cash price of 200000
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On 12 June 2011 at 14:00
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CA IN PRACTICE
16719 Points Joined May 2011
tds amount would be 60000
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On 12 June 2011 at 14:01
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CA
919 Points Joined June 2009

what about the car....you are saying that CAR is free of TDS?

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On 12 June 2011 at 14:05
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CA
919 Points Joined June 2009

You are wrong Future CA....CAR is not tax Free

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On 12 June 2011 at 14:06
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CA.....
2800 Points Joined December 2007

Only some terms of contract cannot supercede income tax act so kingfisher is liable to pay TDS @ 30% on both cash prize and car........

Tds to be deposited:-

200000*30%=60000

             +

let x=tds

x=(520000+x)*30%

x=156000+.3x

0.7x=156000

x=222857/-


Total amount of TDS to be deposited = 222857+60000 i.e Rs. 2,82,857/-


correct me if m wrong

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On 12 June 2011 at 14:19
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CA IN PRACTICE
16719 Points Joined May 2011
in my view the car should be taken as advertisement expense hence tds on car should be deducted for whome car is purchased. rectify me if i am wrong
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On 12 June 2011 at 14:23
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ACA
1432 Points Joined May 2009

it will be Rs. 232533


It is calculated as below...

Value of Car = 520000

Cash = 200000

Total Wiinig Value = 720000

TDS (tax) = (720000 + tax) x 30.90% - 200000 (recovery of tax)

22480 + 0.309Tax = Tax

Tax = 22480/0.691 = 32533

TDS to be deposit with CG = 32533 + 200000 = Rs. 232533

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On 12 June 2011 at 14:24
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CA
919 Points Joined June 2009

Sorry Ankur Your answer is wrong

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On 12 June 2011 at 14:26
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CA
919 Points Joined June 2009

No Future CA, Car cannot be taken as a adevertisement expenses...it has been given to the winner as a prize

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On 12 June 2011 at 14:29
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CA IN PRACTICE
16719 Points Joined May 2011

thanks for rectifying me        

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On 12 June 2011 at 14:30
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ACA
1432 Points Joined May 2009

what about my ans dear...????

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On 12 June 2011 at 14:34
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CA IN PRACTICE
16719 Points Joined May 2011

give your answer so that all can know

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On 12 June 2011 at 14:34
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CA.....
2800 Points Joined December 2007

Now give your answer too buddy.......

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On 12 June 2011 at 14:35
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CA
919 Points Joined June 2009

Hey Arvind Answer is Correct

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On 12 June 2011 at 14:39


CCI Pro

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