Financial Year 1984-85
Circular No. 389 was issued by the Central Board of Direct Taxes on 4 August 1984. Its subject is Financial Year 1984-85.
The annual instruction on deduction under section 194BB from winnings from horse races for financial year 1984-85, following Circular No. 366 dated 20-7-1983 for the previous year. It gives the Part II First Schedule rates under the Finance Act, 1984: 33.75 per cent, made up of income-tax at 30 per cent and surcharge at 3.75 per cent, for a person other than a company whether resident or non-resident, with the non-resident paying the higher of that or the rate that would apply if the winnings were his total income; 22.575 per cent for a domestic company and 73.5 per cent for a non-domestic company. The tax deducted must be paid to the credit of the Central Government within one week from the last day of the month of deduction, through the Reserve Bank, the State Bank or another authorised public sector bank, with income-tax and surcharge shown correctly and the right challan used - No. 2 with a red colour band for company payees and No. 8 with a blue colour band for non-company payees. It reproduces section 276B: failure without reasonable cause to deduct or to pay over is punishable with rigorous imprisonment of six months to seven years and fine where the amount exceeds one hundred thousand rupees, and three months to three years and fine otherwise.
The routine yearly communication of the rates and procedure for deduction from horse race winnings.
FINANCIAL YEAR 1984-85
1760. Instructions for deduction of tax at source from winnings from horse races during financial year 1984-85 at the rates specified in Part II of First Schedule to Finance Act, 1984
1. I am directed to invite a reference to this Department’s Circular No. 366 [F. No. 275/23/83-IT(B)], dated 20-7-1983, on the above subject, wherein the rates at which deduction of tax under section 194BB to be made during the financial year 1983-84 from winnings from horse races were communicated.
2. The Finance Act, 1984 prescribes the rates for deduction of tax at source for the financial year 1984-85 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
33.75 per cent (IT 30 per cent + SC 3.75 per cent);
(b) where the person is not resident
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, 1984, 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
22.575 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. 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 the 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 of the Income-tax Act, 1961, 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, 1961, 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. 389 [F. No. 275/16/84-IT(B)], dated 4-8-1984.
In old TDS default and prosecution proceedings against a race club for winnings paid in that year.
Source: the Income Tax Department’s own published text — its page for this instrument.