Tax on winning prizes

[SPIC Ltd.]

Dear Sir

Wish you a blessed and prosperous New Year 2012! 

I recently won a bike (TVS Wego) in a lucky draw contest. The OTR price of the bike is Rs.56945/- and the ex-showroom price is Rs.48903/- which includes a VAT of Rs.6318/-. When I went to the showroom to collect my prize, the dealer told me that I have to remit 30% tax on the ex show room price of the bike. The dealer also told me that apart from paying this 30% on Rs. 48903/-, I should also bear the VAT, registration & insurance charges and  other taxes like road tax etc. Considering all this, my overall liability comes to around Rs.23000/-. I am quite doubtful whether the dealer is giving me the right information regarding the payment. I request you to kindly clarify whether I am liable to make the above payments as required by the dealer. 

Thanking you

Regards

Eva Dhurairaj

[Guest]

Dear Dhurairaj,

TDS on Winning Prizes deducted / collected and deposited TDS in Govt. Accounv become a Sponsor. and u r responsible to pay tax 30%.

And Confirmation of payment of tax from sponsor no need to require by prizer winner.

 

Txs.

 

AI Summary

Tax on winning prizes: prizewinners may be required to bear withheld tax and related statutory charges upon claiming prizes. Tax on winning prizes: a prizewinner was required by the dealer to remit tax calculated on the bike's ex showroom price and to bear separate charges including VAT, registration, insurance and other levies. The adviser stated that the sponsor/dealer withholds and deposits tax on prizes and that the prizewinner remains responsible for payment; no separate confirmation of payment by the sponsor is necessary, and ancillary statutory charges are payable by the prizewinner.