Deduction of income-tax at source-sections 194B of the Income-tax Act, 1961-Prizes awarded to the agents under "Lucky dip draws", etc.-Clarification regarding - Income Tax - 264/1980

Deduction of income-tax at source-sections 194B of the Income-tax Act, 1961-Prizes awarded to the agents under "Lucky dip draws", etc.-Clarification regarding Circular No. 264 Dated 11/2/1980 From Shri S.R. Wadhwa, Deputy Secretary to the Govt. of India. To All State Governments (including Union Territories). Subject: Deduction of income-tax at source-sections 194B of the Income-tax Act, 1961-Prizes awarded to the agents under "Lucky dip draws", etc.-Clarification regarding. Sir, This Ministry has had an occasion to consider the question of the deduction of tax at source under section 194B of the Income-tax Act, 1961, from prizes awarded to lottery agents in what are popularly known as "lucky dip draws". 2. Under the scheme of "lucky dip draws" the agents are generally grouped into various categories according to the number of tickets purchased by them. The prizes are awarded, category-wise, through draws of the lucky tickets. These prizes are "lotteries" within the meaning of section 194B of the Act as they are dependent wholly on the chance draw of a lucky ticket. 3. The State Government and Union territories running lotteries are, therefore, requested to deduct tax at source at the rates prescribed by the annual Finance Act in respect of "Lotteries or Crossword Puzzles" from "lucky dip" prizes won by lottery agents. 4. This clarification may please be brought to the notice of all concerned under the control of the State Governments and Union Territories. Yours faithfully, (Sd.) S.R. Wadhwa, Deputy Secretary to the Government of India.