TDS Rule Changed: Under Section 194B of the Income Tax Act, the rule of TDS applies to winning lotteries and horse races. Earlier, when the amount won from lottery and horse races in a financial year exceeded Rs 10,000, then TDS was deducted. Now, if the income from winning lotteries and horse races is more than Rs 10,000, then TDS will be levied on every income.
TDS Rule Changed: The government has announced to change the method of levying TDS on the income earned from winning lotteries and horse races. This was announced in the Union Budget on February 1. Now, instead of the annual limit, TDS will be deducted on every transaction of more than Rs 10,000. Earlier, when the amount won from lottery and horse races in a financial year exceeded Rs 10,000, then TDS was deducted. Now, if the income from winning lotteries and horse races is more than Rs 10,000, then TDS will be levied on every income.
Attempt to simplify TDS rules
Under section 194B of the Income Tax Act, TDS rule applies on winning lottery and horse race. This change in rules is being seen as an attempt by the government to simplify the tax system. The government wants to increase transparency and compliance by simplifying the tax rules.
Cases of tax evasion will decrease
Changes in the rules for levying TDS and TCS in many categories were announced in the budget. These include mutual funds, dividends and commissions. Changes in the TDS rules on income from lottery and horse race will result in TDS being deducted on income of more than Rs 10,000 every time during a financial year. This means that now TDS will be deducted more times than before. Tax evasion cases will decrease due to upfront tax collection.
New TCS rules on education remittances
In the budget presented on February 1, the limit for TCS on remittances under the Liberalised Remittance Scheme (LRS) has been increased. It has been increased from Rs 7 lakh to Rs 10 lakh. However, TCS has been removed on sending money abroad for education from loans taken through certain financial institutions. If you send money abroad for education without a loan, then an amount of more than Rs 7 lakh will come under the purview of 5% TCS. The earlier rule of 5% TCS will remain applicable on sending money abroad for treatment.
People will benefit from the new rules
The 20% TCS rule will remain applicable on sending money abroad for investment, gifts and other purposes. However, 20% TCS will be levied only on amounts above Rs 7 lakh. Tax experts say that the government has removed TCS on sending money abroad for education from loans taken from financial education, which is a welcome step. This will provide great relief to people pursuing business abroad.
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