Financial Year 1983-84
Circular No. 365 was issued by the Central Board of Direct Taxes on 20 July 1983. Its subject is Financial Year 1983-84.
States the rates for deduction under section 194B from winnings from a lottery or crossword puzzle for the financial year 1983-84, as specified in Part II of the First Schedule to the Finance Act, 1983. Deduction is due where the winnings paid to a person, resident or non-resident, exceed Rs. 1,000. For a person other than a company, resident or non-resident, the rate is 33.75 per cent, being income-tax at 30 per cent and surcharge at 3.75 per cent, with a non-resident bearing the higher of that or the slab rates in Sub-Paragraph I of Paragraph A of Part III of the First Schedule if the winnings had been his total income. For a domestic company the rate is 22.575 per cent and for a company other than a domestic company 73.5 per cent. There is no change in the main provisions of the law on this deduction.
The annual instruction to State Governments and their officers on deduction from lottery and crossword puzzle winnings, following on Circular No. 338, dated 4-5-1982, which had carried the rates in the Finance Bill, 1982.
FINANCIAL YEAR 1983-84
1745. Instructions for deduction of tax at source from winnings from lottery or crossword puzzle during financial year 1983-84 at the rates specified in Part II of First Schedule to Finance Act, 1983
1. I am directed to invite a reference to the Board’s Circular No. 338 [F. No. 275/17/82-IT(B)], dated 4-5-1982, wherein you were requested to issue necessary instructions for making deduction of income-tax at source from the "winnings from lottery or crossword puzzle" at the rates given in Part II of the First Schedule to the Finance Bill, 1982.
2. You are aware that under section 194B every person responsible for paying to any person, whether resident or non-resident, any income by way of winnings from any lottery or crossword puzzle in an amount exceeding Rs. 1,000 is required to deduct income-tax thereon at the rates specified in this behalf in the Finance Act of the relevant year. The rates of deduction of income-tax at source for the financial year 1983-84 specified in Part II of the First Schedule to the Finance Act, 1983, are as follows :Rates of income-tax including surcharge
I. In the case of a person other than a company :
(a) where the person is resident in India
33.75 per cent (IT 30 per cent + SC 3.75 per cent);
(b) where the person is not resident in India
33.75 per cent (IT 30 per cent + SC 3.75 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 Act, 1983, if the winnings from lottery or crossword puzzle had been the total income,
whichever is higher.
II. In the case of a company :—
(a) where the company is a domestic company
22.575 per cent (IT 21.5 per cent + SC 1.075 per cent);
(b) where the company is not a domestic company
73.5 per cent (IT 70 per cent + SC 3.5 per cent).
3. There is no change in the main provisions of the law relating to deduction of income-tax at source from winnings from lotteries and crossword puzzles.
4. These instructions may please be brought to the notice of all concerned under the control of the State Government.
Circular : No. 365 [F. No. 275/22/83-IT(B)], dated 20-7-1983.
In a demand under section 201 on a State lottery department or agent for short deduction from prize money paid in 1983-84.
A resident individual wins Rs. 50,000 in a State lottery in 1983-84. Tax deductible is 33.75 per cent of Rs. 50,000, that is Rs. 16,875, made up of income-tax of Rs. 15,000 and surcharge of Rs. 1,875. Had the winner been a domestic company, the deduction would have been Rs. 11,287.50.
Source: the Income Tax Department’s own published text — its page for this instrument.