Deduction of tax at source-Section 194BB of the Income-tax Act, 1961-Deduction from income by way of winnings from horse races-Financial Year 1984-85 - Income Tax - 389/1984

Deduction of tax at source-Section 194BB of the Income-tax Act, 1961-Deduction from income by way of winnings from horse races-Financial Year 1984-85 Circular No. 389 Dated 4/8/1984 From B. Nagarajan, Secretary, Central Board of Direct Taxes. To All Race Clubs. Subject: Deduction of tax at source-Section 194BB of the Income-tax Act, 1961-Deduction from income by way of winnings from horse races-Financial Year 1984-85. Sir, I am directed to invite a reference to this Department Circular No. 366 (F. No. 275/23/83-IT-B), dated the 20th July, 1983, printed at [1984] 145 ITR (St.) 7, on the above subject, wherein the rates at which deduction of tax u/s. 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 XVIIB 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 ITO 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. 7. The copies of this Circular will be available with the Director of Inspection (Research, Statistics Public Relations) 6th Floor, Mayur Bhavan, Connaught Circus, New Delhi-110 001. Yours faithfully, (Sd.) B. Nagarajan, Secretary, Central Board of Direct Taxes.