Racing can slip into a deep coma

 

By Sharan Kumar

One is not sure how proactive the Turf Authorities of India are in finding solutions to prevent the impending TDS regime set to kick in April. Instead of the old scheme under which TDS was deducted only on earnings of more than Rs 10,000 on one ticket, the new system envisages payment of TDS once the earnings cross Rs 10,000. Under the new regime, the onus is on the club to deduct the TDS and hence the clubs are expected to maintain the KYC of all its punters.

 

The deduction is not under 194 A under which you can set off losses against income. The TDS is under 195 BB which means that the money that you earn is considered a windfall gain and it cannot be set off against losses. The money deducted is gone out of the system for good. In the absence of KYC, all winnings will have to be taxed. As a result, the punter may end up giving money out of his pocket when he has played a short-priced favourite. The taxing is on gross winnings which include your investment as well. The original betting amount is subject to 28 per cent GST plus club commission. The dividends will be subject to a further 30 per cent tax if there is no KYC! 

 

Gaming bodies have represented against the new TDS regime but the turf authorities led by Shivkumar Khenny have let down the racing fraternity big time. While he was busier promoting himself, the so-called legal luminaries of BTC may have been clueless. Khenny did not take any proactive stance despite the announcement about TDS having come about 45 days ago.   

What is more, the scheme will extend to the bookmakers as well. The specious argument that the clubs will find it challenging to maintain the KYC of all punters will not hold water because nowadays, with digitisation, all the people are under KYC including vegetable vendors, and in some cases, even beggars have a UPI identity. There is also an option of not having a KYC and paying tax on the entire money which includes investment plus dividend.

The Bangalore Turf Club Chairman Shivkumar Khenny who was also the Chairman of Turf Authorities of India till the first week of March was only interested in self-glory and the conduct of Invitation Cup weekend where the standing instructions perhaps were to announce his title for a sickening number of times. One has to excuse him because other than prefixing his name as Chairman, he cannot be accused of having any racing knowledge. His behaviour during the running of the Invitation Cup was reportedly in bad taste as he is set to have lowered the dignity of the position of the Chairman of Turf Authorities of India.

 

Among the turf authorities of India, the two clubs which will be hit immediately under the new TDS regime would be Bangalore Turf Club and Mysore Race Club. These clubs are entirely dependent on the money generated by their activities. The club cannot expect its members to put their hands in their pockets to sustain the activity as it happened in the case of RWITC. The Hyderabad Race Club and Madras Race Club have adequate funds to keep their activity going. RWITC has generous patrons. The RCTC is said to be on the verge of clinching a real estate deal which should ensure that the club would be left with enough money in the coffers to keep the activity going.

 

The Bangalore Turf Club has ruined its own tote by replacing an efficient system with something which has serious glitches. The income from totes has dropped phenomenally. The club is charging a high entry fee which is also having a negative impact on attendance which is way below what was par a few years ago. The betting on the bookmakers is full-fledged. The bookmakers have been funding racing by contributing more than Rs 25 crores per year as stall fee and other sundries besides occasional donations like the one they gave for the Invitation Cup.

 

The betting at bookmakers is opaque as it does not reflect the real betting value. Once the club totes come under the new TDS regiment with its KYC compliance, the same will be extended to the betting on the bookmakers. The bookmakers would find the system cumbersome and may beat a retreat unless they learn to circumvent the system as they have always done.

 

The introduction of the National Tote was in the air for one year and even the announcement was made about its starting date ``pompously’’ as former RWITC Chairman Vivek Jain put it. Now with Madras Race Club withdrawing from the combined tote operations and other clubs expressing reservations about the efficacy of the system given the many glitches when handling its own tote operations, the concept of National Tote is as good as buried. The Turf Authorities of India did not show any courtesy in calling those international agencies who had come to make a presentation during the Invitation Cup weekend races thereby highlighting the lack of seriousness of the Turf Authorities of India to act cohesively. 

 

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