Subject To Gain
Rajesh B Shah
(Querist) 19 May 2010
This query is : Resolved
Recently my client won Tata Nano Car on a Consumer Product Scratch Scheme, How will his tax libility count on it, please send me your opnion
Kiran Kumar
(Expert) 19 May 2010
Mr. A V Vishal will give you a good advice on the issue...send him a PM too
Vineet
(Expert) 19 May 2010
Congratulations to your client sir for winning a car.
Now the taxation part, the value of car shall be included as income from other sources u/s 56(2)(ib)and subjected to special rate of tax @30% plus cess u/s 115BB of the Income Tax Act. The organisation who has organised this program has been casted a liability u/s 194B to ensure that tax is paid before releasing the car.
A V Vishal
(Expert) 19 May 2010
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 gambling 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.
‘Lottery’ includes winnings from prizes awarded to any person by draw of lots or by chance or in any other manner whatsoever, under any scheme or
arrangement by whatever name called.
‘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.
B K Raghavendra Rao
(Expert) 19 May 2010
Your client is liable to pay tax on the car he won by lottery. Lottery income is also an income and included while calculating taxable income. There would be no deductions on the lottery income.
