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CS Executive · Tax Laws and Practice · Income from Other Sources

Mr. Rohit Verma wins Rs 2,50,000 from card games and Rs 1,50,000 from betting. He claims that his travel and stay expenses of Rs 30,000 for attending these games should be allowed. Under section 94 of the Income-tax Act, 2025, what is the correct position?

No deduction is allowed, so Rs 4,00,000 is chargeable. Section 94(4) of the Income-tax Act, 2025 bars any deduction for expenditure or allowance related to winnings from card games, other games, gambling or betting, so the Rs 30,000 travel and stay cost is disallowed.

  1. ARs 30,000 is allowed against the card game winnings only
  2. BRs 30,000 is allowed against the betting winnings only
  3. CNo deduction is allowed for the expenditure, so winnings of Rs 4,00,000 are chargeableCorrect
  4. DRs 30,000 is allowed if it is proportionately split between the two winnings

Explanation

Section 94(4) covers winnings from card games and other games, and from gambling or betting of any form. No deduction for any expenditure or allowance related to such income is permitted. Hence the taxable winnings are Rs 2,50,000 + Rs 1,50,000 = Rs 4,00,000, with the Rs 30,000 disallowed.

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