Provisions relating to the deduction of tax at source on winnings from lottery or crossword puzzle. - Income Tax - 1032/CBDT

INSTRUCTION NO. 1032/CBDT Dated : October 28, 1976 Section(s) Referred: 194B ,194C Statute: Income - Tax Act, 1961 Provisions relating to the deduction of tax at source on winnings from lottery or crossword puzzle, payments to contractors and sub-contractors and insurance commission (Section 194-B, 194-C and 194-D) were introduced in the Income-tax Act with a view to ensure that the various classes of persons receiving incomes from these sources do not escape the tax net and also to ensure that payments of tax on incomes from these sources were not delayed. Instances have come to the notice of the Board which go to show that some of the Officers are still not adequately conscious of the existence of these provisions. 2. In this connection, attention is invited to the public Circulars issued from time to time explaining these provisions as well as the departmental instructions issued clarifying the doubts arising in the implementation of these provisions. Attention is, in particular, invited to the D.O. letters F. No. 380/3/75-IT(B) dated the 3rd February 1975 and F. No. 380/3/76-IT(B)/IT(J), dated the 29th May 1976 from Member (B A) and the D.O. letter F. No. 380/3/75-IT(B)/IT(J), dated the 3rd April 1976 from Shri K. R. Raghavan, the enforcement of the provisions relating to tax deduction at source. Proformae were devised and sent with those letters to ensure, among others, that the Officers would, in the process, collect all relevant data and also become fully aware of the manner of enforcing the provisions relating to tax deduction at source. In addition, the problem of enforcing the provisions of tax deduction at source (para. 129 of the minutes of the Conference). The Chairman also emphasised the immense potential of enforcement action in this area of work and stressed that adequate administrative/statutory vigil in this regard would pay handsome dividends. He also required you to take appropriate measures to ensure that full potential of this source of revenue was realised (Para. 131 of the minutes of the Conference) 3. A survey, both internal and external is to be undertaken if not already started to locate new assessees, in particular, those responsible for deduction of tax at source u/s 194-B, 194-C and 194-D. It is also to be ensured that the law in this regard is strictly enforced by taking necessary coercive measures provided in the Act. 4. With regard to sections 194-B and 194-C, the proformae in which information is required to be furnished, have already been sent to you vide Member (Budget Audit)'s D.O. letters referred to above. The results of the survey would be duly reflected in the statements on those proformae for the year 1976-77 which should be sent before 30th June 1977.