Taxation - Income TaxQuestion 5577 of 146
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7. Raju earned 25,000 from lotteries, ` 10,000 from betting, ` 50,000 from online games (on internet) and lost ` 5,000 in card games during P.Y. 2023-24. The amount of tax to be charged for A.Y. 2024-25 will be -

Options

A30% of (` 25,000+` 10,000) + 20% of ` 50,000 and adjustment of unexhausted basic limit is permitted against this income.
B30% of (` 25000 + ` 10,000 + ` 50,000 - ` 5,000) and adjustment of unexhausted basic limit is permitted against this income.
C30% of (` 25,000 + ` 10,000 + ` 50,000) and adjustment of unexhausted basic limit is not permitted against this income.
D30% of (` 25,000 - ` 5,000) + 20% of (` 10,000 + ` 50,000) and adjustment of unexhausted basic limit is not permitted against this income. (2 Marks)
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Correct Answer

✅ Option C — 30% of (` 25,000 + ` 10,000 + ` 50,000) and adjustment of unexhausted basic limit is not permitted against this income.

All Options:

  • A30% of (` 25,000+` 10,000) + 20% of ` 50,000 and adjustment of unexhausted basic limit is permitted against this income.
  • B30% of (` 25000 + ` 10,000 + ` 50,000 - ` 5,000) and adjustment of unexhausted basic limit is permitted against this income.
  • C30% of (` 25,000 + ` 10,000 + ` 50,000) and adjustment of unexhausted basic limit is not permitted against this income. ✓
  • D30% of (` 25,000 - ` 5,000) + 20% of (` 10,000 + ` 50,000) and adjustment of unexhausted basic limit is not permitted against this income. (2 Marks)

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Detailed Solution & Explanation

Under the provisions of the Income-tax Act, 1961:
- Winnings from card games and lotteries are taxable at a flat rate of 30% under Section 115BB.
- Net winnings from online games are taxable at a flat rate of 30% under Section 115BBJ.
- Under Section 58(4), no deduction in respect of any expenditure or allowance (including business losses or card game losses) is allowed in computing income from winnings from lotteries, crossword puzzles, card games, betting, etc. Thus, the loss of ₹5,000\displaystyle ₹5,000 in card games cannot be set off against card game winnings or any other income.
- Adjustment of unexhausted basic exemption limit is not permitted against winnings taxable under Section 115BB and Section 115BBJ.
Therefore, the tax will be charged at 30% of (₹25,000\displaystyle ₹25,000 from lotteries + ₹10,000\displaystyle ₹10,000 from card games + ₹50,000\displaystyle ₹50,000 from online games) and no adjustment of unexhausted basic exemption limit is allowed.

Hence, **Option C** is the correct answer.

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