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Kaun Banega Crorepati? -- For sure, it's I-T Dept

Our Bureau

NEW DELHI, Oct. 27

APART from St Catherine Home Society and Child Relief and You, who are the other beneficiaries of Sonali Bendre and Amir Khan's philanthropic gesture of donating their prize money won from Kaun Banega Crorepati's (KBC) blockbuster Diwali episode?

KBC's producers would not gain for sure. Neither would the two celebrity stars, as the liability to cough up tax on the prize money rests on them. A partial relief though may be available to these stars as the Income-Tax Act provides for tax breaks on do nations made to certain funds and charitable institutions. This leaves the tax authorities who would benefit from the transaction.

Currently, prize money winners of KBC or similar windfall shows are required to pay up 40 per cent of the total income accruing to them from the game as tax alongwith the surcharge of 15 per cent on this. The liability would be the same whether it is Son ali Bendre, Harshvardhan Nawate or Amir Khan. The tax department earned Rs 46 lakhs from Nawate, who emerged as KBC's first crorepati some time back.

In technical parlance, the principle of `application of income' works on winners donating their proceeds. This principle is relevant in this case as the two stars would have asked producers of KBC to draw cheques in favour of the two charitable instituti ons. Donations of this sort cannot be treated as diversion of income, say tax officials.

Deductions are, however, available under Section 80 G of the I-T Act to assessees (the prize winners in this case) in respect of donations to certain funds and charitable institutions.

A 100 per cent deduction is now available on donations made, among others, to the Prime Ministers Relief Fund, the National Foundation for Commmunal Harmony, a University or any educational institution of `national eminence' as may be approved by the pre scribed authority, National Blood Transfusion Council, the Army Central Welfare Fund, any fund set up by the State Government to provide medical relief to the poor and a few others.

A recent addition to this category is any donation made to the Fund for Technology Development and Application set up by the Union Government.

In other cases, the deductible amount is up to 50 per cent of the donation. This means that the 40 per cent tax rate alongwith the relevant surcharge would apply on the balance 50 per cent.

Presuming that they have no other income assessable to tax, Amir Khan's tax liability would work out to Rs 11.5 lakhs. Sonali Bendre would be poorer by Rs 5.75 lakhs.