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KBC, What People Don't Know about prize money?
Watching KBC these days? We are too
Who would not like to participate and win big in KBC? We would certainly like to participate but didn't get the chance this year also. Don't worry, you might have a great luck and could be the next participant we see on the show. Best of Luck!
Kaun Banega Crorepati aka KBC is one of the most watched programs in India and people have been following it for years now. The program with prize money to be won based on how much questions you can answer has certainly added to the habits of learning new things. From students to professors, from housewives to working women or men for that matter, from working professionals to businessmen, people are trying to reach this big stage and that too with the power of knowledge. The luck obviously is a factor to get you in.
The Truth which you are Unaware of
Well, what we have said so far is something that's related to getting you in and winning. Now, let’s talk about the terms and conditions of shows like KBC that you are unaware of (obviously the terms and conditions are there and most of the people aren't bothered about it.) What if we tell you, even after Big B (Amitabh Bachchan) Signing that big 1 Crore cheque for you & you would still not get 1 Crore as your prize money.
Yes, you heard it right!! As per the income tax laws in India, the IT department deducts a flat 30.9% from the prize you have won. And, it's not specific to KBC, the tax is deducted from any prize money you win from any contest/quiz or lottery.
Disheartened? No, we do not want to dishearten you but to make you aware of the legal aspects of winning prize money & tax implications on such prizes.
Tax Implications on the Winnings in Cash by the Participants
Section 115BB of the Income-tax Act governs the winnings by lottery, betting, gambling, crossword puzzle, card games or other games of any sort and the TDS on such income is liable to be deducted under Section 194B of the IT Act. As per this section, the person paying any such winnings exceeding Rs 10,000/- is required to deduct income-tax at 30%. In fact, considering the levy of 3% less on the amount of income-tax, the effective tax rate would work out to 30.9%.
Another important point which needs to be mentioned here is even in a case where a participant has no source of income at all and his prize money from a lottery or a game show is only Rs 1,00,000/- then also tax of Rs 30,900/- would still be levied on the same since no basic tax exemption or any allowance or deduction are eligible for set-off against such winnings.
Tax Implications on the Winnings in Kind by the Participants
If the winnings are wholly in kind, or partly in cash and partly in kind, and cash is not sufficient to meet the TDS liability, the person responsible for paying shall, before releasing the winnings, have to ensure that tax has been paid in respect of the winnings. Thus, don't be surprised if you have won a car as a prize for a game or a scheme and you are called upon by the organizer to deposit 30% of the car value towards TDS.
Further, every participant in shows like KBC have to sign the terms and conditions in which it is clearly mentioned as under:-
Any and all taxes and/or levies applicable on the prize money won by the Participant(s), under the laws of India shall be borne by the Participant(s) in relation to the prize. Payment of prize money to the Winner(s) shall be after deduction of all applicable taxes and levies and subject to providing the relevant documents as intimated by the Company and will be paid within the time stipulated by the Company.
Lastly, if you are a winner of any cash or kind, either by luck or by chance, or even using your own skill or intelligence, this saying definitely suits you, Uparwala deta hai chhappar phaadke, Magar usmein 30% Aaykar kaatke!