Financial Year 1981-82
Circular No. 301 was issued by the Central Board of Direct Taxes on 29 April 1981. Its subject is Financial Year 1981-82.
The yearly instruction on deduction from winnings from horse races for the financial year 1981-82, at the rates in Part II of the First Schedule to the Finance Act, 1981. For a person other than a company, resident or non-resident, the rate is 33 per cent, being income-tax of 30 per cent and surcharge of 3 per cent, or the rate that would apply if the winnings were the total income under Sub-Paragraph I of Paragraph A of Part III of the First Schedule, whichever is higher. For a domestic company the rate is 22 per cent and for a company other than a domestic company 71.75 per cent, in each case income-tax plus surcharge. Tax deducted must be paid into the Reserve Bank of India, the State Bank of India or an authorised public sector bank within one week from the last day of the month of deduction, using challan No. 2 with the red colour band for payments to companies and challan No. 8 with the blue colour band for others. It also sets out the section 276B punishment for failing to deduct or to pay: rigorous imprisonment of not less than six months and up to seven years with fine where the amount exceeds Rs. 1,00,000, and not less than three months and up to three years with fine in any other case.
The Board issues these deduction instructions each year to help the persons responsible for deducting; this one follows Circular No. 280 dated 20 September 1980, which carried the rates for 1980-81.
FINANCIAL YEAR 1981-82
1763. Instructions for deduction of tax at source from winnings from horse races during financial year 1981-82 at the rates specified in Part II of First Schedule to Finance Act, 1981
1. I am directed to invite a reference to this Department’s Circular No. 280 [F. No. 275/19/80-IT(B)], dated 20-9-1980, on the above subject, wherein the rates at which deduction of tax under section 194BB to be made during the year 1980-81 from winnings from horse races were communicated.
2. The Finance Bill, 1981 proposes the rates for deduction of tax at source for the financial year 1981-82 as specified in Part II of the First Schedule to the said Act. They are as below :Rates of income-tax including surcharge
I. In the case of a person other than a company—
(a) where the person is resident
33 per cent (IT 30 per cent + SC 3 per cent);
(b) where the person is not resident
33 per cent (IT 30 per cent + SC 3 per cent);
or
income-tax and surcharge on income-tax in respect of the income at the rates prescribed in Sub-Paragraph I of Paragraph A of Part III of the First Schedule to the Finance Bill, 1981, if such income had been the total income,
whichever is higher.
II. In the case of a company—
(a) where the company is a domestic company
22 per cent (IT 21.5 per cent + SC 0.5 per cent);
(b) where the company is not a domestic company
71.75 per cent (IT 70 per cent + SC 1.75 per cent).
3. The tax deducted should be paid to the credit of the Central Government by remitting it into the office of the Reserve Bank of India or State Bank of India or any other authorised public sector bank within one week from the last day of the month in which the deduction is made. While making the payment of tax deducted at source to the credit of the Central Government, it may please be ensured that the correct amount of income-tax and surcharge is recorded in the relevant challan. It may also be ensured that the right type of challan is used. The relevant challan for making payment of tax deducted at source from payments by way of winnings from horse races made to company-assessees is No. 2 with "Red Colour Band" and in respect of payments made to non-company-assessees is No. 8 with "Blue Colour Band".
4. Attention is also invited to section 276B wherein it is provided that if a person without reasonable cause or excuse fails to deduct, or after deducting fails to pay the tax as required under the provisions of Chapter XVII-B, he shall be punishable—
(i) in a case where the amount of tax which he has failed to deduct or pay exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; and
(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine.
5. These instructions are not exhaustive and are issued only with a view to helping the persons responsible for making deductions of tax under this section. Whenever there is a difference of opinion, a reference should always be made to the provisions of the Income-tax Act, and the relevant Finance Act through which the changes in the tax structure are made.
6. In case any assistance is required, the Income-tax Officer concerned or the local Public Relations Officer of the Income-tax Department may be approached for the same, who will, if necessary, obtain the orders of higher authorities in the matter.
Circular: No. 301 [F. No. 275/11/81-IT(B)], dated 29-4-1981.
In a section 201 or prosecution proceeding against a race course or book-maker for that year, and in reading an old deduction certificate on winnings.
Source: the Income Tax Department’s own published text — its page for this instrument.
