After winning the gold medal in the Olympics, prizes raining on Neeraj Chopra. Some are giving him a cash gift and some are giving him the reward. In such a situation, the question in the minds of many people is whether the players will have to pay tax on the prizes he got. In such a situation, we are telling you that how much tax will he have to pay on the prizes that the players have got.
Chartered Accountant Anand Jain explains that under section 10(17A) of the Income Tax Act, if the central and state governments give any kind of reward to a winning player, then it will be completely tax-free. In 2014, the Central Board of Direct Taxes (CBDT) had passed an order to make tax-free cash or goods received by the central or state governments as prizes for medal winners in the Olympic Games, Common Wealth Games and Asian Games.
Anand Jain says that only the reward received from the central or state government is not taxed. Apart from this, if the winner gets any reward from somewhere, then tax will have to be paid on it. Like Anand Mahindra has announced to give a car reward to Neeraj Chopra. Neeraj Chopra will have to pay 30% tax on this car.
As per the provision of income tax, only the prizes received by the winning players are tax-free. There is a provision of tax on the reward received by other players, coaches etc. For example, the tax will have to be paid on the prize money given by the Haryana government to nine members of the women's team.
Under the current rules, if you receive a gift worth more than Rs 50,000, then you will have to pay tax on it. Sometimes you get a gift on many occasions in a year and its total value may be more than 50 thousand rupees. In such a situation, you should keep this in mind while filing the income tax return. You will have to give information about gifts above Rs 50,000 in income tax. If you hide this information from the Income Tax Department, you may face difficulties later.
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