What are Section 194B & Section 194BB?
If you have income from winning a lottery, crossword puzzle, card game, gambling, betting, or horse race, TDS is deducted under Section 194B or 194BB if the income exceeds INR 10,000.
- Section 194B – Payer should deduct TDS at 30% on winnings from the lottery, crossword puzzles, card games, and other similar incomes
- Section 194BB – Payer should deduct TDS at 30% on horse race income
Incomes under Sec 194B & 194BB
Following are the types of payments as per Section 194B & Section 194BB:
- Winning from Lottery
- Crossword Puzzle
- Races including Horse Race
- Card Games
- Gambling
- Betting
- Game Shows
- Any other income of similar nature
When & Who shall deduct TDS u/s 194B & 194BB?
TDS is required to be deducted at the time of payment of the prize. If the payer makes payment in installments, they must deduct TDS at the time of actual payment of each installment.
A person liable to distribute the prize for winning from lottery, crossword puzzle, card game, horse race, etc should deduct TDS from the payment and pay the balance amount to the winner. TDS should be deducted only if the winning amount exceeds INR 10,000.
The Deductor should deposit the TDS with the government and file a TDS Return on TRACES.
Rate of TDS u/s 194B & 194BB of Income Tax Act
The payer shall deduct tax at the rate of 30% under Sec 194B from the money paid for winnings from the lottery, crossword puzzles or card games, and other similar games if the amount exceeds INR 10,000.
The payer shall deduct tax at the rate of 30% under Section 194BB from the money paid for winnings from a horse race or income from wagering or betting in any racecourse if the amount exceeds INR 10,000.
Due Date to deposit TDS u/s 194B & 194BB
| Particulars | Time Limit to deposit TDS |
| If the amount is credited in the month of March |
|
| If the amount is credited in a month other than March | Within 7 days from the end of the month which deduction is made |
TDS Certificate
Deductor i.e. prize distributor shall issue a TDS Certificate to the deductee i.e. winner in Form 16A for TDS deducted on income from winning a lottery, crossword puzzle, card game, gambling, betting u/s 194B or income from horse race u/s 194BB.
TDS Return
The Deductor i.e. prize distributor is liable to deduct tax under section 194BB or Sec 194B of Income Tax Act. They shall file quarterly returns in Form 26Q within the following due dates:
| Quarter | Due Date |
| April to June | 31st July |
| July to September | 31st October |
| October to December | 31st January |
| January to March | 31st May |
FAQs
Income on Dream 11 is a betting income. The income tax rate on such income is 31.2% (30% plus 4% cess). If your net winning from a contest exceeds INR 10,000, they would deduct TDS at 30% and credit the remaining amount to your account. You can then withdraw the funds without paying any additional tax.
The income tax on prize money from winning the lottery, puzzles, card games, etc is a flat rate of 30%. For any prize in kind such as a car, jewellery, holiday trip, etc you must calculate tax on the market value of the prize. Thus, the payer should deduct TDS at 30% of the aggregate amount of the prize in cash and the market value of the prize in kind.
The income tax rate on income from playing online games is a flat rate of 30%. If the winning amount exceeds INR 10,000, the poker platform would deduct TDS at 30%. They would deposit TDS with the government, file a TDS Return, and issue a TDS certificate to the winner. The taxpayer i.e. winner should file ITR, report such income as taxable income, and claim the TDS Credit. However, the taxpayer cannot claim any refund of the TDS deducted from such income.
Hey @Dia_malhotra
As per section 194A, TDS on interest other than interest on securities is required to be deducted by any person other than Individual or HUF at the rate of 10%, when paid to a resident. No surcharge, education cess or SHEC shall be added to the above rate.
Hope this helps!
Hey @HarishMehta
TDS u/s 194J needs to be deducted by deductor other than an individual or a HUF, @ 10% on any amount paid or payable to any which is in excess of INR 30,000 as:
Hope this helps!
Hello @the_AK,
Against gross income, you can claim business expenses that you have incurred for earning that income. So you can claim this service fee as a business expense from the gross income received by you.
Hope this helps!
Hey @Bharti_Vasvani can you please help here?
Hello @Anuj_Agarwal,
TDS will be deducted by the company when the interest is actually paid on the securities, so at that time whoever is the owner of such security shall receive the interest and can claim credit of interest.
Hope this helps!
Hey @Anuj_Agarwal,
You can check out this article for more clarity:
Hope this helps!
I have respectable salary income and 1000 insurance commission…ie old commission…not claiming any expenses…can i show it as other income in itr1 or have to file itr 3
Hi @Shivam_B
If you have income from salary and income from insurance commission (business income), then you will be required to file ITR 3.
Itr 3 is so big…have to pay heavy charges…for filing…will it be defective if i do so ie reporting 1000 as other income in itr1 along with salary income…have closed down the insirance work since yesrs…i even contacted commssiom giving broker and closed my commission account…still they are showing in 26as wheress i am not receiving in real
Hi @Shivam_B
As per the recent utilities, ITD gives you the option to select only the schedules applicable to you while filing ITR.
Thus, you are not required to go through the entire ITR 3 form. You can also prepare and file ITR on Quicko, where you can upload form 16 and add commission income under the head “Business & Profession” and file ITR 3, without any charges as Quicko is a DIY platform helping individuals to file taxes.