First KBC winner, Harshvardhan Nawate, gets tax relief on winning amount

Harshvardhan Nawathe, who was the very first winner on TV quiz show Kaun Banega Crorepati (KBC), can heave a sigh of relief as the Income Tax (I-T) Department recently withdrew its appeal challenging a 2009 order, passed by the Income Tax Appellate Tribunal (ITAT), which had waived off tax liability calculated at 40 per cent on the Rs 1 crore winning amount.

Advocate Suresh Kumar appearing for the department informed the Bombay High Court said, "The tax effect involved in the present appeal is less than Rs 20 lakh, and as per a circular issued by Central Board of Taxes (CBDT), dated December 10, 2015, the department has taken a policy decision not to prosecute the appeal, wherein the tax effect is less than Rs 20 lakhs."

In 2000, Nawathe became the first person to win the Rs 1 crore jackpot on KBC, which is hosted by actor Amitabh Bachchan. The I-T department had, in 2009, moved the Bombay High Court claiming the tribunal had wrongly waived off Nawathe's tax liability of about 40 per cent on the winnings, as declared in the returns filed for assessment year 2000-2001.

Kumar said Nawathe had clubbed his winnings with his regular earnings for 2000-2001. He had paid Rs 35 lakh towards tax. However, the winning amount should have been calculated under Section 115BB of the Income Tax Act, which was not done, by him, Kumar contended. Section 115bb of the Act states that winnings from lotteries, puzzles or racing have to be taxed at 40 per cent.

Nawathe is one of the many beneficiaries of the 2015 circular, which is primarily issued with a view to reduce pending litigation of the revenue department. Prior to 2015, the tax effect benefit was upto Rs 10 lakh.

Kumar said since the circular has been issued, from 2016 till now, over 700 appeals filed by the department have been withdrawn. On Wednesday, over 80 cases came to be withdrawn by the department.