TOPIC DETAILS
Posted By : Mad Max Posted On : Jul 11, 2017
Subject :Solved TDS deducted @ 30% on "Exempted Amount 1000
@ Hi guys,

THE STORY:
As you all know I have received one jackpot each during A.Y. 2015-16 and A.Y. 2016-17 and the BTC deducted 30% TDS on entire dividend. During A.Y. the exemption was Rs 5,000 and during A.Y. 2016-17 Rs.10,000 was exempted. At the time of writing this post (say A.Y. 2017-18), Rs.10000 is exempted from TDS from horse race winning and TDS has to be deducted @ 30% on any amount beyond Rs.10000. However, while encashing the ticket BTC I questioned the Accounts Department why they deduct 30% on exempted amount, they replied the punters have to file the I.T. returns annually to claim the refund. I faced lot of harassment inordinate delay from the BTC Accounts Department, whether it is releasing payment cheque or TDS Certificate.

After that I faced lot of trouble again to file the I.T. Returns. Any tax payer doing it their own on IT website will find it difficult to complete the E-filing. Even in Bangalore there are only limited number of CAs who are handling Racing Related returns, rest of the CAs say (I have contacted at least 10) there is no way we can claim the refund.

I have knocked the door of few top notch men at the helm of affairs in BTC for help. It was not a matter of prestige or the money lost. My aim was to solve this problem once and for all, and help those hapless punters whose legitimate money is illegally deducted and deposited in ITD in the name of TDS.

Lot of help received from a senior jockey's elder brother who is happened to be an owner and a member of the Club. They introduced a CA to me and filed the returns on 26.06.2017. Although there was a mistake in filing the returns, due to which I got some excess money as refund. I got the refund order on 07.07.2017. Refund amount credited to my bank account today 11th July 2017. The excess money has to be returned with interest to ITD upon receipt of Notification in that effect later. Anyway the matter is solved now.

NOW EXPLAINING HOW TO FILE THE IT RETURNS TO CLAIM THE REFUND FROM ITD/CPC (Centralised Processing Center).

COMPUTATION OF INCOME AND TAX THEREON:
(Suppose you have only Horse Racing Income)
For example: Total Dividend declared is Rs 50,000
(BTC deducted TDS @ 30% = 15,000 and paid balance Rs 35,000 to you. And your annual Income is below Rs 2,50,000.

(A) INCOME FROM OTHER SOURCES : 50,000 - 10,000 = 40,000
(B) Income Chargeable to Tax at Special Rate: 40,000
(C) Total Income: 40,000
(D) Income which is included in 'Total Income" and chargeable to tax at Special Rate: 40,000
(E) Tax on Special Income: @ 30% = 12,000
(F) Net Tax Payable: 12,000
(G) Rebate under section 87A : Rs 5,000
(H) Tax Payable after Rebate : 7,000
(I) Education Cess 0.03% on 7,000: Add: 210 = 7210
(J) Gross Tax Liability: 7,210
(K) TDS: 15,000
(L) REFUND AMOUNT: 15,000 - 7,210 = 7,790
(M) TOTAL INCOME TAX REFUND: 7,790
Note: Out of 7790, 3000 is the excess TDS deducted on exempted amount.
Rs. 4,790 is the Net rebate available.

In case anyone wants to file IT returns, please take my Email ID from Indiarace Admin and contact I will guide you to contact details of the CA.

Good Luck to All !

a
  Specialist said ... On : 7/14/2017 9:17:41 PM
@ Max Max,

Really a helpful information for fellow punters.

Your solving this tax information as narrated by you was a tough experience for you I guess. This tells us (punters) that race clubs do not "care a dam" for punters who are their bread and butter.

Anyways, I really appreciate your endurance in solving this one.


Thank you

  Atchut said ... On : 7/12/2017 8:56:02 PM
@Mad Max
Done a very good job which highly appreciable n is helpful to punters community.

Thanks

  raghavan said ... On : 7/12/2017 5:03:23 PM
@Mad Max.

I was not aware of this Section 87a. So thanks for that info.

  Tarun said ... On : 7/12/2017 12:03:24 PM

Good work Max. You seem to be in the wrong profession(not sure about your current one) but really helpful.

  Mad Max said ... On : 7/12/2017 11:58:33 AM
@ Raghavan
Profit 50K, TDS 15K,Take Home 35K
This is what BTC doing ok.

We are not mentioning this 35K anywhere in our Computation of Income. We are showing 40K (50K-10K exemption) as our Income and the TDS payable as 12k only. And we get a rebate of Rs 5K under section 87A (AY 2017-18)*, so this amount shall be deducted from 12K. So kindly note we are paying tax Rs 7000 only. Interest on delay, Education cess etc have to be adjusted, then show the TDS we paid thru BTC i.e. 15K. Deduct the Tax payable 7k from 15K and the rest is refundable.

* Read more about Rebate Section 87A, and also the changing Rebate Amount, every year and applicable to whom. I have shown above an example of computation of Income only for demonstration purpose. There are some conditions, that you can read on the following links.

https://cleartax.in/s/income-tax-rebate-us-87a

  raghavan said ... On : 7/12/2017 10:13:21 AM

@mad max,

profit 50k, tds 15. Take home 35.

If 10k exemption allowed, then tax payable is 12k. cess 360/-.

Only now, I have been told about this additional rebate of 5k under section 87A.

I do not think you have mentioned this aspect (5000 rebate u/s 87A) in any of your previous postings. Correct me if I am wrong.

  kkk said ... On : 7/12/2017 12:00:46 AM
great man!! only request change your name from mad max to intell max.. i have seen your deep analysis on racing.. however you should have been in different field to help many more..


all the best!!


thanks
kumar

  Confused P said ... On : 7/11/2017 11:17:02 PM
Well done Max, true to your chosen name.