Audit or not ..
tdeli
(Querist) 04 June 2012
This query is : Resolved
Section 44 AB of the I T Act says that film actors need to get their accounts audited if their income is above 15 lakhs for the A.Y. 2012-2013.
A is a TV Artist who gets 12 lakhs receipts as Reality Show TV Artist and he also gets 4 lakhs as a Film Actor in a Film which totals to 16 Lakhs.
1.Will A need to get is Accounts Audited or not,as his income from Films was only 12 lakhs or will his income from TV Shows will also be added for the purpose of audit.
2.Does a TV Artist also needs to get his accounts audited if his income goes above 15 Lakhs annually .
Thanks...
A V Vishal
(Expert) 04 June 2012
Prior to analyzing the incidence of income-tax associated with the award of prize money to the winners of such shows, it becomes essential to fathom the concept of "income" itself. Sub-clause (ix) of Section 2(24) of the Indian Income Tax Act, 1961 (hereinafter referred to as "the IT Act") deems as income any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. It is essential to note that this sub-clause is not confined to mere betting or gambling activities and also includes within its ambit winnings/earnings received from non-gambling activities. Reliance in this regard can be placed on an important judgment rendered by the Hon'ble Supreme Court in CIT v. Karthikeyan 1 , wherein it was held that the term "income" also includes monies received from non-gambling or non-betting activities.
Further, clause (ii) of the Explanation to Section 2(24)(ix) of the IT Act clearly states that, "card game and other game of any sort" includes any game show, an entertainment programme on television or electronic mode, in which people compete to win prizes or any other similar game.
The word "income" is of widest amplitude and must be given its natural and grammatical meaning, therefore, in light of the above, the earnings of the winners appearing on such reality shows can be said to bear the character of income, and accordingly become liable to tax.
Once it is established that the winnings in the hands of the participants appearing on reality shows can be classified as income, it then becomes imperative, to characterize this income under the specific heads as laid down in the IT Act, in order to determine its taxability.
Unquestionably, the winnings from reality shows cannot be categorized under the specific heads of income like salaries, income from house property, capital gains, etc consequently, such income is assessed under the head "Income from other sources" as per Section 56 of the IT Act. Therefore, the casual and non-recurring income derived by the winners of such reality contests, from the aforesaid sources, shall be chargeable to tax in terms of Section 115BB of the IT Act, at a flat rate of 30% on the gross winnings (without deduction of any allowance or expenditure), and such tax shall be deducted at source.
Profession :
“Profession” may be defined as a vacation, or a job requiring some thought, skill and special knowledge like that of C.A., Lawyer, Doctor, Engineer, Architect etc. So profession refers to those activities where the livelihood is earned by the persons through their intellectual or manual skill.
Since the difference is unambiguous, hence, the client need not get his books audited u/s.44AB, since his professional receipts is only Rs.4.00 Lakhs.
Suhail A.Siddiqui
(Expert) 04 June 2012
Profession turnover attain 15 Lakhs are liable to audited. TV Artist are also professional like film actor
C. P. CHUGH
(Expert) 04 June 2012
It is not clear from the query, whether a sum of Rs. 12.00 lacs stated to be income from TV Realty show is in the nature of winning a contest/show or participation Fee as Actor of the Realty Show. In case it is in the nature of winning, Mr Vishal has beautifully explained the provisions, otherwise, it is nothing but his professional income and together with Rs. 4.00 lac as income from Films, he is liable for getting his accounts audited u/s 44AB of the Act.
tdeli
(Querist) 04 June 2012
12 lakhs are participation fee in a reality show and 4 lakhs income from performing in a film .
For the purpose of Sec 44AB of Income Tax Act, 1961, legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, or any other notified profession (i.e., authorised representative, film artist, company secretary and information technology) are specified professions and their incomes should be audited.
The defination of a film artist means- any person engaged in his professional capacity in the production of a cinematograph film whether produced by him or by any other person, as—
(i) an actor
(ii) a cameraman;
(iii) a director, including an assistant director;
(iv) a music director, including an assistant music director;
(v) an art director, including an assistant art director;
(vi) a dance director, including an assistant dance director;
(vii) an editor;
(viii) a singer;
(ix) a lyricist;
(x) a story writer;
(xi) a screen-play writer;
(xii) a dialogue writer; and
(xiii) a dress designer.
Now please explain whether a TV Artist comes under the purview of the definition of a Film Artist or not .
Sankaranarayanan
(Expert) 05 June 2012
You mean u won the prize through reality show. Then it is under winningf game or lattery k. If the amount come thrugh ur profession then if the money exceed morethen 12 then it is liable to tax auit
tdeli
(Querist) 05 June 2012
every profession is not taxable if the income is above 15 lakhs
Only notified professions are liable to audit which includes Film Actors, but do TV artists also are to included as Film actors or not ..
