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Tax on lottery income

RAJ KUMAR (FINANCE MANAGER) (1393 Points)

25 March 2012

HELLO FRIENDS, MY CLIENT HAS WON A LOTTERY OF RS 100000 AND DEDUCTED TDS RS 30000

BUT HE HAS NO OTHER INCOME AND HE WANTS TO FILE HIS RETURN

NOW WHETHER HE HAS TO PAY TH EDUCATION CESS RS 900 AS SELF ASSESSMENT TAX OR NOT.

PLS. HELP ME.

THANKS.

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20 Replies

Harshal Fifadra (Chartered Accountant) (1489 Points)
Replied 25 March 2012

Yes he has to pay it ......

Balram Begari (Accountant) (122 Points)
Replied 25 March 2012

Dear Sir,

I am little confused that what you are to suppose to ask anyway on the provided information i will tell you what to do.

Your friend won lottery and earnred Gross Amount of Rs 100000/- but where as the Company deducted TDS of Rs 30000/- U/s 194-B (any payment earn from lottery above Rs 10000/- subject to TDS @ 10%) and therefore after deducting TDS of Rs 30000/- your client got Net of Rs 70000/- where as your client might got Form 16A for Deduction of TDS (where he cliam in fliling Income Tax return).

In your above information provided that your client no source of Income then, this income to be considered under Income from others (as you correctly stated).

But in your in case date of lottery winning not mentioned anyway i will considered as AY.2011-12 (FY 2010-10)

Anyway you can file ITR-2 With claimng Refund of Rs 30,000/- (as your client not even crossed theresold of Rs 1,80,000)

best regards,

Balram

Rup Kumar (finance manager) (288 Points)
Replied 25 March 2012

Yes, he has to pay cess @ 2%+1%.

CA.Ganesh (Practicing Chartered Accountant) (308 Points)
Replied 25 March 2012

since his total income does not exceed the basic exemption limit, he need not pay any tax including cess. He can claim refund of tax already deducted

Ashish Sablok (B.Com(H),CA Final) (132 Points)
Replied 25 March 2012

he can't claim any exemption as it is not available in income from lottery

Phalgun (Audit Manager) (327 Points)
Replied 25 March 2012

If the client has no other income then he will not come under tax liability. He shall file the return stating amount deducted as TDS & the same will be refunded .For your info, Edu cess is not deducted at the time of TDS but payable at the time of final tax liability arising (if any )

nitin suvarna (C.A FINAL) (828 Points)
Replied 25 March 2012

why E C is payable ??

CA.Vinita Gupta (Deputy Manager- Finance) (2918 Points)
Replied 25 March 2012

Yes he has to pay and cannot claim any Refund

Aravind.. (CA) (1262 Points)
Replied 26 March 2012

Income from lottery has to be taxed at a special rate @ 30% + Cess3%. So he has to pay 3 % Cess. No question of refund.

Mahendra Relwani (CA) (33 Points)
Replied 26 March 2012

"Sec 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 (not being income from the activity of owning and maintaining race horses) or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, the income-tax payable shall be the aggregate of -

(i) The amount of income-tax calculated on income by way of winnings from such 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 or nature whatsoever, at the rate of thirty per cent.; and

(ii) The amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i).

Explanation : For the purposes of this section. "horse race" shall have the same meaning as in section 74A."

The analysis of this section says that your client cannot claim refund of the T.D.S paid on lottery income and he has to pay education cess and higher secondary education cess on Rs.30000.

1 Like

Anand Luhar (Entrepreneur(CA/CWA Gold Medal)) (254 Points)
Replied 26 March 2012

people dont advice wrongly to people if u dont know dont advice no expemtion avilable in case of wining from lottery and tax 30+3% is to be paid so yes need to fill return and tax too

people plz have a look on provision then answer anyone

Balram Begari (Accountant) (122 Points)
Replied 26 March 2012

Dear sir, I am regreting for same and we have to correct our mistake and correct it. like seniors who guide us . Thank you sir.

sajid (Auditor) (214 Points)
Replied 26 March 2012

No need to file the ITR, and there is no refund .

Roshan A (Chartered Accountant) (458 Points)
Replied 26 March 2012


	Income from lottery has to be taxed at a special rate @ 30% + Cess3%. So he has to pay 3 % Cess. No question of refund.

Agree Incomes like Winnings from Lottery, Horse races,card games are taxed at flat 30%+3% irrespective of whether total is income below exemption limit.