IncomeCard Games Taxability - Taxpublishers.in

SUBSCRIBE FOR FULL CONTENT


The Tax Publishers Income--Card Games--Taxability Query Gross winnings from Rummy card game - 11,00,000 Loss from Rummy Card games - 13,00,000 Net loss - 2,00,000 Whether tax payable under section 115BB. No TDS deducted Reply It appears that the querist is referring to two different games of similar nature. In one of such games the assessee incurred losses while in other it made a profit. The question is whether the loss can be set off against profit and hence no tax is to be paid or gains alone would be taxed ignoring the losses. At the first let us have a look at the relevant provisions first: '58.Amounts not deductible.--(4) In the case of an assessee having income chargeable under the head 'Income from other sources', no deduction in respect of any expenditure or allowance in connection with such income shall be allowed under any provision of this Act in computing the income by way of any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature, whatsoever : Provided that nothing contained in this sub-section shall apply in computing the income of an assessee, being the owner of horses maintained by him for running in horse races, from the activity of owning and maintaining such horses. 115BB. Where the total income of an assessee includes any income by way of winnings from any lottery or crossword puzzle or race including horse race (not being income from the activity of owning and maintaining race horses) or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, the income-tax payable shall be the aggregate of (i) the amount of income-tax calculated on income by way of winnings from such lottery or crossword puzzle or race including horse race or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, at the rate of thirty per cent; and SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income--Card Games--Taxability

Query

Gross winnings from Rummy card game - 11,00,000

Loss from Rummy Card games - 13,00,000

Net loss - 2,00,000

Whether tax payable under section 115BB.

No TDS deducted

Reply

It appears that the querist is referring to two different games of similar nature. In one of such games the assessee incurred losses while in other it made a profit.

The question is whether the loss can be set off against profit and hence no tax is to be paid or gains alone would be taxed ignoring the losses.

At the first let us have a look at the relevant provisions first:

'58.Amounts not deductible.--(4) In the case of an assessee having income chargeable under the head 'Income from other sources', no deduction in respect of any expenditure or allowance in connection with such income shall be allowed under any provision of this Act in computing the income by way of any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature, whatsoever :

Provided that nothing contained in this sub-section shall apply in computing the income of an assessee, being the owner of horses maintained by him for running in horse races, from the activity of owning and maintaining such horses.

115BB. Where the total income of an assessee includes any income by way of winnings from any lottery or crossword puzzle or race including horse race (not being income from the activity of owning and maintaining race horses) or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, the income-tax payable shall be the aggregate of

(i) the amount of income-tax calculated on income by way of winnings from such lottery or crossword puzzle or race including horse race or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, at the rate of thirty per cent; and