Circular No. 217

Instructions for deduction of tax at source from winnings from lottery or crossword puzzle during financial year 1977-78 at the rates specified in Part II of First Schedule to Finance (No. 2) Bill, 1977

What this is

Circular No. 217 was issued by the Central Board of Direct Taxes on 31 March 1977. Its subject is Instructions for deduction of tax at source from winnings from lottery or crossword puzzle during financial year 1977-78 at the rates specified in Part II of First Schedule to Finance (No. 2) Bill, 1977.

What it does

Tells State Governments to keep deducting tax at source from lottery and crossword puzzle prizes during the financial year 1977-78 at the rates that applied in 1976-77, because the Finance Bill, 1977 as introduced prescribes the same rates. Until further instructions the rates in Part II of the First Schedule to the Finance Act, 1976 are to be used, and any doubt is to be taken to the Income-tax Officer concerned.

Why it was issued

The rates for the coming year were still at Bill stage, and the Board wanted deduction to continue without interruption on the footing that the Bill made no change.

Who it reaches

State Government lottery departments and their paying officers
Organisers of crossword puzzle competitions
Prize winners whose payments suffer deduction

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

Instructions for deduction of tax at source from winnings from lottery or crossword puzzle during financial year 1977-78 at the rates specified in Part II of First Schedule to Finance (No. 2) Bill, 1977
1. I am directed to invite a reference to this Department’s Circular No. 198 [F. No. 275/61/76-ITJ], dated 25-6-1976 on the subject of deduction of income-tax from lottery and crossword puzzle prizes during the financial year 1976-77. The Finance Bill, 1977, as introduced in the Parliament, prescribes the same rates for deduction of tax from lottery and crossword puzzle prizes during the financial year 1977-78 as were in force during the financial year 1976-77. Hence, until further instructions, tax at source from payments of income by way of lottery and crossword puzzle prizes may be deducted at the same rates as are given in Part II of the First Schedule to the Finance Act, 1976.
2. These instructions may please be brought to the notice of all concerned under the control of the State Government. In cases of doubt, the Income-tax Officer concerned may be consulted.
Circular : No. 217 [F. No. 275/19/77-IT (B)], dated 31-3-1977.

What to watch

This is an interim direction expressly subject to further instructions once the Finance Act of that year was passed.
It states no rates of its own; the figures have to be taken from Part II of the First Schedule to the Finance Act, 1976, as explained in Circular No. 198 dated 25 June 1976.
The heading refers to the Finance (No. 2) Bill, 1977 while the text refers to the Finance Bill, 1977; the rates in either event are the 1976 ones the circular directs be continued.
The direction is for the financial year 1977-78 and has no bearing on any later year.

Where you meet it

An old TDS default proceeding for the financial year 1977-78 where the rate applied has to be traced through the annual circulars.

← Circular No. 218 · Circular No. 216 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.