After winning the gold medal in the Olympics, it is raining prizes on Neeraj Chopra. Some are giving them a cash gift and some are giving them a car 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 they have got. In such a situation, we are telling you that how much tax will they have to pay on the prizes that the players have got.
The rewards received by the central and state government remain tax-free.
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.
Tax will have to be paid on other rewards
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.
Only the winning players get the reward tax free
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.
Where did Neeraj get the reward of how much?
For winning the gold medal in the Olympics, the Haryana government announced a cash reward of Rs 6 crore.
The Punjab government has announced a cash reward of Rs 2 crore to Neeraj Chopra.
The Railways has announced a grant of Rs 3 crore and the Manipur government Rs 1 crore.
The BCCI has also announced a reward of Rs 1 crore to Neeraj Chopra for winning the gold medal in the Olympics.
IPL franchise Chennai Super Kings has also announced a grant of Rs 1 crore to Neeraj Chopra.
Mahindra Group Chairman Anand Mahindra has said that the XUV700 will be awarded to Neeraj.
The Indian Olympic Association has also announced a reward of Rs 75 lakh for Neeraj Chopra.
The tax has to be paid on gift or reward of more than 50 thousand
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 an 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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