SECTION 194BB – WINNINGS FROM HORSE RACE

1099. Rules and forms framed for the purposes of deduction of tax at source from winnings from horse race under the section from 1-6-1978

1. Under the new section 194BB, every person being a book-maker or a person to whom a licence has been granted by the Government under any law in force for horse racing in any race course or for arranging for wagering or betting in any race course, who is responsible for paying any income by way of winnings from any horse race in an amount exceeding Rs. 2,500 is required to deduct income-tax thereon at the rates prescribed in this behalf in the Finance Act of the relevant year. The obligation to deduct tax at source under this provision will apply only in relation to pay­ments made after May 31, 1978.

2. The Board have notified the Income-tax (Fifth Amendment) Rules, 1978 on May 25, 1978, with a view to providing for certain consequential and ancillary matters. These rules seek to amend rules 28, 30, 31 and 37 and to prescribe certain forms for the purposes of this provision. The main features of the amendments to the Income-tax Rules are explained below :

1. Under section 197(1)(a ) in the case of any person other than a company, it will be open to the recipient of the winnings from horse race to make an application to the Income-tax Officer and obtain from him a certificate authorising the payer to deduct tax at such lower rate or deduct no tax, as may be appropriate in his case. The amendment to rule 28 seeks to provide that the applica­tion of this purpose is to be made in Form No. 13BB in the Rules.

2. The amendment to rule 30 seeks to provide that the tax deducted by the person responsible for paying the income by way of winnings from a horse race should be paid to the credit of the Central Government within one week from the date of such deduction or the date of receipt of the challan by the person making the deduction, as the case may be.

3. The amendment to rule 31 seeks to provide that the person responsible for making deduction of tax under section 194BB shall issue a certificate in the new Form No. 19BB to the person to whom winnings from horse race have been paid, showing therein the amount of income by way of winnings from horse race, the amount of tax deducted at source and other prescribed particulars.

4. The amendment to rule 37 seeks to provide that the person responsible for making the deduction of income-tax from the winnings from horse races shall also furnish to the Income-tax Officer having jurisdiction to assess him a quarterly statement in the new Form No. 26BB on July 15, October 15, January 15 and April 15, in respect of the deductions made during the immediate­ly preceding quarter.

Circular : No. 241 [F. No. 142(4)/78-TPL], dated 1-6-1978.

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