FINANCIAL YEAR 1985-86
1759. Instructions for deduction of tax at source from winnings from horse races during financial year 1985-86 at the rates specified in Part II of the First Schedule to Finance Act, 1985
1. I am directed to invite a reference to this Department’s Circular No. 389 [F. No. 275/16/84-IT(B)], dated 4-8-1984 on the above subject, wherein the rates at which deduction of tax under section 194BB to be made during the financial year 1984-85 from winnings from horse races were communicated.
2. The Finance Act, 1985 prescribes the rates for deduction of tax at source for the financial year 1985-86 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||IT 30 per cent, SC Nil;|
|(b) where the person is not resident||IT 30 per cent of the amount of the income;|
|income-tax and 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, 1985 (Annex), 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% + SC 1.075 per cent)|
|(b) where the company is not a domestic company||68.25 per cent (IT 65 per cent + SC 3.25 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 race made to company-assessee is No. 2 with “Red Colour Band” and in respect of payments made to non-company-assessee 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 Act, and the relevant Finance Act through which the changes in the tax structure are made.
Circular: No. 425 [F. No. 275/31/85-IT(B)], dated 24-7-1985.
ANNEX – EXTRACT FROM THE FINANCE ACT, 1985 – SUB-PARAGRAPH I
OF PARAGRAPH A OF PART III OF THE
In the case of every individual or Hindu undivided family or unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii ) of clause (31) of section 2 of the Income-tax Act, not being a case to which Sub-Paragraph II of this Paragraph or any other paragraph of this Part applies.
Rates of income-tax
|(1)||where the total income does not exceed Rs. 18,000||Nil;|
|(2)||where the total income exceeds Rs. 18,000 but does not exceed Rs. 25,000||25 per cent of the amount by which the total income exceeds Rs. 18,000;|
|(3)||where the total income exceeds Rs. 25,000 but does not exceed Rs. 50,000||Rs. 1,750 plus 30 per cent of the amount by which the total income exceeds Rs. 25,000;|
|(4)||where the total income exceeds Rs. 50,000 but does not exceed Rs. 1,00,000||Rs. 9,250 plus 40 per cent of the amount by which the total income exceeds Rs. 50,000;|
|(5)||where the total income exceeds Rs. 1,00,000||Rs. 29,250 plus 50 per cent of the amount by which the total income exceeds Rs. 1,00,000.|