The Hindu Business Line : Offshore lottery win is taxable onshore

A company in the UK made an electronic computer draw of all mailing addresses of a particular mailing site and my name figured as the winner of the lucky draw.

I am now to receive the prize amount through swift wire transfer to my bank account. Will I be required to pay tax on the same in India and if so at what rate? — Deepak

The sum received by you should apparently be treated as winnings from a lottery and therefore be taxable. Tax will be payable by you at 30 per cent (as increased by the appropriate surcharge and additional surcharge) in accordance with Section 115BB of the Act.

I was employed in DEL Computers in Bangalore till September 8, 2006. I resigned from the company and joined a Singapore-based firm as a permanent employee, my place of posting also being at Singapore. I received salary from my Indian employer for the period April 1, 2006 to September 8, 2006, that is, for 162 days during the financial year 2006-07.

My Singapore employer paid me salary for my employment at Singapore from September 11, 2006 to March 31, 2007, that is, for 203 days. Will I be required to pay tax for the income earned in Singapore in the financial year 2006-07 in India? Please note that I have paid the tax on the income earned in Singapore in that country. — Ganesh Borse

For the financial year 2006-07 you would be a non-resident in accordance with Section 6 of the Income-Tax Act since you have been outside India for more than 182 days and further since you left India in that previous year to take up employment outside India.

As you will be a non-resident for that previous year, you will only be taxed for the income earned by you in India by way of salary from your Indian employer and will not be liable to tax for the salary earned by you for your employment in Singapore from your employer at Singapore.

My father received arrears of pension from his employer through a bank for the period from 1988. The bank deducted tax at source at the applicable rate. While calculating the TDS, the bank has not taken into account the monthly pension earned by him.

If the monthly pension is added to the arrears, there is a further tax payable over and above that deducted.

If however the pension is spread over for the period to which it relates, a refund arises for the current year. Should he pay the differential tax or claim refund by filing return? — R. Savithri

Your father's taxable income will be computed including the arrears. However, while computing the tax payable by your father, he will be entitled to a relief under Section 89. He will have to compute his tax after claiming the necessary relief under Section 89 and determine his tax liability. If a refund arises thereafter he can claim the same or if there is a tax payable the same will have to be paid by him.

I am 26 years old and unmarried. My father is no more. I work as a software engineer and earn about Rs 2.60 lakh per annum.

I pay the tuition fee of my two younger brothers. Can I claim a deduction in respect of the same? — Srinivas

No deduction can be claimed by you in respect of the tuition fees paid by you for the education of your two younger brothers. The deduction under Section 80-C in respect of tuition fee can only be claimed by an individual where it is towards the education of any two children of such individual. No deduction is available on the tuition fee paid for the education of the brothers of an individual.

I am an individual residing in Mumbai. I live in a rented premises and pay rent to the owner who is also an individual. Should I deduct tax at source while making the payment of rent? — Arun Prasad

While all persons other than individuals and Hindu Undivided Families will have to deduct tax at source while making payment of rent if the rent exceeds Rs 1,20,000 per annum, individuals and HUFs will have to deduct tax at source only if their total sales / gross receipts / turnover from business in the immediately preceding previous year exceeds Rs 40 lakh per annum or from profession in the immediately preceding previous year exceeds Rs 10 lakh per annum and further when the rent paid in the previous year exceeds the amount stated above.

You may determine whether you would be liable to deduct tax at source based on the above parameters.

My father's house was sold in 2004. I received my share of amount from the sale proceeds which I deposited in a capital gains account scheme of a nationalised bank.

This deposit matures in July and I have not invested the same in a new property. I also do not expect to invest the same in a new property before July 2007 when it matures. Can I extend the term of the deposit which is made in the capital gains account scheme?

If not will it be possible for me to invest the amount which I withdraw from the capital gains account scheme in bonds of the National Housing Bank or Rural Electrification Corporation? — Venkatesh

There is no possibility of extending the term of the capital gains account scheme.

If within three years from the date of sale of the original property you do not complete construction of another residential house or if within two years from the date of sale of the original property you do not purchase another residential house, the capital gain which was earlier exempt by virtue of such investment in the capital gains account scheme will be chargeable to tax in the year in which the period of three years from the date of transfer of the original asset expires.

You may also not be able to get any exemption by investing these proceeds in bonds of the National Housing Bank or Rural Electrification Corporation.

It is presumed that your father had purchased the house and it devolved on you as one of the legal heirs before the sale of the property.

(Mail your queries to taxtalk@thehindu.co.in or by post to `Tax Talk', Business Line, Kasturi Buildings, 859, Anna Salai, Chennai-600002)