Circular No. 303

What it does

Tells deductors that the Finance Bill, 1982 proposes no change in the Part II rates for deduction at source from winnings from lottery or crossword puzzle for the financial year 1982-83, so deduction is to continue at the rates last communicated for 1981-82. Where instead the rates in Sub-Paragraph I of Paragraph A of Part III of the First Schedule apply, deduction must follow that annexed Sub-Paragraph, which the Bill does propose to change. The circular closes with the caution that it is only an aid and that the Finance Act of the relevant year governs any difference of opinion.

Why it was issued

It is the annual instruction to lottery and crossword puzzle payers on the year's deduction rates, carrying forward the rates given in the earlier circular of 12-5-1981 for 1981-82.

Who it reaches

Lottery organisers and agents paying prize money in 1982-83
Crossword puzzle promoters deducting at source
Prize winners, resident and non-resident

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.

FINANCIAL YEAR 1982-83
1746. Instructions for deduction of tax at source from winnings from lottery or crossword puzzle during financial year 1982-83 at the rates specified in Part II of First Schedule to Finance Bill, 1982
1. I am directed to invite a reference to the Board’s Circular No. 303 [F. No. 275/6/81-IT(B)], dated 12-5-1981, wherein you were requested to issue necessary instructions for making deduction of income-tax at source from "winnings from lottery or crossword puzzle" at the rates given in Part II of the First Schedule to the Finance Bill, 1981.
2.The Finance Bill, 1982 does not propose any change in the rates of deduction of tax at source from such income for the financial year 1982-83 in Part II of the First Schedule thereof. However, some changes have been proposed in Sub-Paragraph I of Paragraph A of Part III of the First Schedule to the said Financial Bill, a copy of which is annexed. The tax should, therefore, continue to be deducted at source during the financial year 1982-83, at the rates intimated in the Board’s Circular referred to in para 1 above except where the rates prescribed in Sub-Paragraph I of Part III of the First Schedule are applicable. The deduction of tax should be made in accordance with the annexed Sub-Paragraph I , wherever it is applicable.
3. These instructions are issued only with a view to helping the persons responsible for making deductions of tax under the provisions of the Income-tax Act. The Finance Act of the relevant year through which the changes in the tax structure are made should always be referred to for any difference of opinion.
Circular : No. 338 [F.No. 275/17/82-IT(B)], dated 4-5-1982.

What to watch

The record is filed under Circular No. 303 dated 12-5-1981, but the text signs off as Circular No. 338 dated 4-5-1982 and it is that later circular this note describes.
The rates speak only for financial year 1982-83 and are carried over from the previous year's circular, which has to be read with this one.
It is written on the Finance Bill, 1982 as introduced, so the Act as passed had to be checked.
The Part III Sub-Paragraph I carve-out is the limb most easily missed.

Where you meet it

On an old short deduction demand against a lottery agent for prize payouts in 1982-83.

← Circular No. 304 · Circular No. 302 →

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.