The truth that individuals can earn cash by collaborating in Recreation Reveals has been a crowd puller in India for the previous a few years. It began with KBC the place the contestants had the chance to win some huge cash and it grew to become standard immediately.
Quickly, different TV Channels additionally launched a number of reveals like Huge Boss, MTV Roadies, Dance India Dance and so forth. the place the contestants may win some huge cash.
In actual fact, the web growth in India within the final couple of years has additionally led to a surge in on-line gaming like Rummy, Poker, Dream 11, Fantasy League and so forth which provide the contestants a chance to win some huge cash.
However how will the tax be paid on such earnings?
On this article, we focus on about how tax can be paid on winnings from KBC, different TV Reveals and On-line Gaming
Tax on Prize Cash earned from TV Reveals and On-line Gaming
The cash earned from such recreation reveals is taxable beneath Part 56(2)(ib) and is to be disclosed beneath head “Earnings from Different Sources” on the time of submitting of the earnings tax return.
As per Part 56(2)(ib), any earnings from any of the next sources is chargeable to tax as “Earnings from Different Sources”:-
- Lotteries
- Crossword Puzzles
- Races incl. Horse Races
- Card Video games and different Video games of any type
- Playing or Betting of any kind or nature by any means
Because the phrase “Card Video games and different video games of any type” is talked about, it will embody the earnings from On-line Gaming. Subsequently, earnings from on-line gaming would even be required to be disclosed beneath head “Earnings from Different Sources”.
Furthermore, Finance Act 2001 clarified that Card Video games and different recreation of any type contains any recreation present, an leisure programme on tv or digital mode through which individuals compete to win prizes or every other comparable recreation.
Though in some TV Reveals, it’s not solely a recreation as their is it entails good use of information, the earnings earned from such reveals would nonetheless be categorised as “Earnings from Different Sources” and taxed on the charges talked about right here beneath.
Earnings Tax @ 31.20% on Winnings from such TV Reveals and On-line Winnings
Earnings earned from successful KBC Recreation Present, Huge Boss, Nach Baliye, India’s Bought Expertise, Worry Issue and different recreation reveals is taxable at a flat charge of 30%. Over and above this earnings tax charge of 30%, Cess @% would even be levied on this 30% tax and subsequently the complete tax charge on such winnings from Recreation Reveals comes out to be 31.20%.
The good thing about earnings tax slab charges wouldn’t be obtainable in such a case and earnings can be taxed at a flat charge of 31.2%.
If the prize cash awarded by an organisation is greater than Rs. 10,000 to any particular person in a monetary yr, TDS beneath Part 194B would even be relevant @ 31.2%. The prize cash can be awarded to the contestant after deduction of 31.2% TDS.
Earnings Tax Deductions allowed from such Prize Cash
As per Part 58(4), if a taxpayer has earned earnings from Lotteries, Crossword puzzles, Races, Card Video games, TV & On-line Video games, Playing and so forth. – No deduction in respect of any expenditure or allowance in reference to such earnings shall be allowed whereas computing such earnings.
In different phrases, all the earnings of such winnings, with none expenditure or allowance, will likely be taxable. In actual fact, earnings tax deductions allowed beneath Chapter VI-A i.e. deductions from Part 80C to Part 80U would additionally not be obtainable to be claimed in opposition to such earnings.
Tax on Different Incomes earned by the one who has gained the Recreation Present
Tax on Different Incomes of the one who has gained the Recreation Present would proceed to be taxable as per the Earnings Tax Slab Charges.
For eg: If an individual earns Rs. 1 Crore from a TV Present and earns Rs. 15 Lakhs as Earnings from Wage/Enterprise/ every other supply, he can be required to pay tax as follows:-
Tax on Rs. 1 Crore @ 31.20% i.e. Rs. 31,20,000
Tax on Rs. 15 Lakhs as per the Earnings Tax Slab Charges after permitting for deductions.
Though Earnings Tax Deductions are usually not obtainable from Successful from such Recreation Reveals, deductions would proceed to be obtainable on his different earnings i.e. Rs. 15 Lakhs.
Different Related Factors relating to Tax on Successful from Recreation Reveals
- In case the winner is being awarded cash in money/cheque/demand draft/on-line switch and so forth., such fee can be made after deduction of TDS @ 31.20%
- In case the winner is being awarded a present in type, the winner can be required to estimate the worth of such fee after which pay tax @ 31.2% from his personal pocket.
- In case the successful contestant diverts a sure share of such successful in favour of the Govt. or in favour of an company conducting such lottery, then such quantity is not going to be taxed within the fingers of the winner.
- The opposite incomes earned by the winner other than successful categorised beneath this part can be taxable as per the conventional provisions of the earnings tax act i.e. as per earnings tax slab charges/ capital positive aspects tax charge and so forth because the case could also be.
- There is no such thing as a solution to save tax on successful from such TV Reveals/ On-line Recreation Reveals and the particular person incomes the earnings can be required to pay tax on the entire worth of earnings.