Accounting income tax liability

Different tax treatment is given to the money received from different sources when the tax liability of that particular person is considered. Let us now see these amounts as to which category they belong and what would be the tax implication.
Winning from lottery as well as horse race is taxed in the hands of the recipients but it is not aded to his other normal income but taxed separately. It is important to note this point because normal income is given usual deductions under the tax rules and same is not applicable for the earnings from the lottery and horse race. So, the winnings from lottery and horse race are taxable at a flat rate of 31.2% (including cess). In fact if the amount of these winnings is more than Rs 10,000 then TDS @31.2% is deducted at source itself. So, in the above case the person will receive only the reduced amount by this percentage. The lottery winning of Rs 1,00,000 and horse race winning of Rs 35,000 both will get reduced to that extent.
Gift at the time of marriage is not considered for tax so it is not taxable so the amount of Rs 1,40,000 is not taxable.
Gift from the close relations like brother is also not considered for tax purposes so the amount of Rs 1,00,000 received from brother is also not taxable.
Gift from a friend is exempted for tax up to a limit of Rs 50,000 but it is considered in totality from all the friends. Suppose a person gets gift from 5 friends and the total exceeds Rs 50,000 then the whole amount would be taxable. In your query above the total gift received from the friends is Rs 20,000 + 80,000 + 18,000 = Rs 1,18,000 which is obviously more than Rs 50,000. So the whole amount of Rs 1,18,000 would be taxable in the hands of the recipient as per his total income and tax slabs.

Hi,
I am giving a pointwise Answer to your questions:

1.Exempt up to 10000 prize money otherwise taxable @30%+cess=1lakh*31.2%=Rs.31200.00
2. -Same as above - tax amount 35000*31.2%=Rs.10920.00
3. Total of up to Rs.50000 in an F.Y. is exempted. So nil
4. Gift from parents, spouse, and sibling exempted so nil tax.
5. Wedding gifts are exempt so nil tax.
6. Exempt within Rs.50000, here Rs.80000 will be added to the receiver's income tax taxed as per his tax slab rate.
7. Below 50000, hence not taxable nil tax.

Now Taxable Income from other sources:

Gift from NRI Friend Rs. 80000.00
will be added with his income

And
Winning from lottery Rs.100000.00 (TDS by the giver Rs.31200.00)
Winning horse race Rs. 35000.00 (TDS by the giver Rs. 10920.00)
will be taxed and the same will be deducted by the giver
and after-tax balance will be received by the recipient.
Rs.(31200+10920)=Rs.42120 will appear in form 26 as of the receiver.

For want of sufficient information the above calculation is only possible.

1. Amount gained in the lottery is Rs.1.00.000/-. As per the income tax rules, irrespective of other income, 30% is the rate of tax. In addition to that, you have to pay a Cess of 1.2%. When the money is given to you the tax in full will be deducted at source and the remaining money only will be given to you. The first Rs.10.000/- is tax-free.
2. On the amount you won in the horse race is also taxed as mentioned above only. You won Rs.35,000/-. From that 31.2% will be deducted at source. So you will receive Rs.24,080/- after deducting the tax at the source.
3. The amount you received as a gift for your marriage and the gift you received from your brother are not taxable.
4. Gifts received from various friends will be totalled. Up to Rs.50.000/- no tax. Above that, you have to pay as per the slabs mentioned in the tax rules. You received Rs1,18,000/- as a gift from your friend. From that after receiving Rs.50,000/-, you have to pay tax on the remaining amount that is Rs.68,000/-. The rate of tax will be decided based on any other earnings and total income during the year.

If your total income is more than 5 lakhs you may be fall in the purview of Income Tax and liable to pay tax. You may have some proper savings permissible under Income Tax Act which may be deducted from your total income in a particular accounting year. If your total income is more than 5 lakhs, you can approach a friendly auditor for verification and if yours is subject return filing, he/she will help you to do so.
Alternatively you can use the specimen working sheet in xl provided by www,commerceangadi.com for initial checking whether you are in the limit of provisions laid under Income Tax Act.