TDS on winnings from lotteries, crossword puzzles, games, horse races – section 194B and 194BB

Tax at the rate of 30% has to be deducted if winnings are from lotteries, crossword puzzles and games including card game.

The person who is responsible for making payments to the winner of lotteries, crossword puzzles and games is required to deduct tax under section 194B at the rate of 30% from the winnings amount at the time of payment.

Section 194B is not applicable if the winnings amount is less than equal to Rs. 10,000. When it exceeds Rs.10,000, the entire amount paid will be subject to TDS at the rate of 30%.

If the winnings from lotteries, crossword puzzles and games is in kind or partly in cash and partly in kind, the person responsible for making payments is required to deduct TDS amount first before releasing  the amount.

The person responsible can settle the cash prize with the TDS to be deducted. When the cash is not sufficient to meet the liabilities, winner of the prize shall deposit the amount equal to the TDS liabilities before claiming the prize.

When the winnings from games, lotteries and crossword puzzles are paid in instalments, tax from such payments are to be deducted while paying each instalments.

For winnings from horse races, rate of TDS is 30%. As per section 194BB, the person responsible for making payments towards horse racing in any race course or for arrangement of wagering or betting is liable to deduct tax at the rate of 30% from the winnings. Tax shall not be deducted if the amount does not exceed Rs. 10,000. If payment exceeds Rs. 10,000, the entire amount shall be liable for TDS under section 194BB.

The person responsible for deducting TDS on winnings from lotteries, crossword puzzles, games and horse races is required to file quarterly TDS return with the IT department. After filing the quarterly return, winner can see the TDS amount deducted in form 26AS online.

Form 16A shall also be issued to the winner after the quarter end as a proof of tax deduction. Based on this certificate, assessee can claim refund for the whole tax deducted out of winnings if he is not liable to tax.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.