My Assessee from 1st April 2017 to 31 March 2018 had 20 transactions of betting on Horses in Horse Races in India. He has received prize in one transaction and T.D.S was deducted u/s 194BB.

Whether we can show the net income of prize money after adjustment of any loss occurred in horse race game? 

Reply

Prize money received in horse race is considered as a casual income which bears TDS u/s 194BB @30% if the prize money is more than Rs. 10,000. And if an assessee incurred loss in horse racing, it cannot be set off against any income of assessee, therefore it shall be ignored.

For example:—Suppose an assessee incurred loss of Rs. 100,000/- in horse race and also won a prize of Rs. 50,000/-

In this case, assessee will receive Rs. 35000/- in hand due to deduction of 30% TDS (Rs. 15000/-).

While filing income tax return assessee should ignore the loss of Rs. 100,000/- and show the gross income Rs. 50,000 under the head income from other source. However the assessee can reduce his income tax liability by utilising the amount of TDS (15000/-).