Section 194B & 194BB – TDS on Lottery, Game Show, Puzzle, Horserace

What is 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 is at 30% on winnings from lottery, crossword puzzles, card games and other similar incomes
  • Section 194BB – Payer should deduct TDS at 30% on horse race income
As per section 206AA if the deductee fails to provide the PAN to deductor then he would suffer deduction at higher of the rates of deduction as: At the rate specified in the relevant provision of the Act, or, At the rate or rates in force, i.e., the rate prescribed in the Finance Act (Finance Act 2019 for FY 2019-20), or At the rate of 20%
Tip
As per section 206AA if the deductee fails to provide the PAN to deductor then he would suffer deduction at higher of the rates of deduction as: At the rate specified in the relevant provision of the Act, or, At the rate or rates in force, i.e., the rate prescribed in the Finance Act (Finance Act 2019 for FY 2019-20), or At the rate of 20%

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 instalments, they must deduct TDS at the time of actual payment of each instalment.

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.

TDS Rate u/s 194B & 194BB

The payer shall deduct tax at the rate of 30% under Sec 194B from the money paid for winnings from lottery,  crossword puzzle or card game and other similar game 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
  • On or before 7th April for Government Deductor
  • On or before 30th April for Other Deductor
If the amount is credited in the month other than March Within 7 days from the end of the month in 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 (26Q) for Non-Salary Payments (Annual)
CA Assisted TDS return filing plan for employers, firms and companies making payment of Professional fees, Rent, Contracts, Commission, etc.
[Rated 4.8 stars by customers like you]
TDS Return (26Q) for Non-Salary Payments (Annual)
CA Assisted TDS return filing plan for employers, firms and companies making payment of Professional fees, Rent, Contracts, Commission, etc.
[Rated 4.8 stars by customers like you]

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 return 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

Will tax be deducted if I withdraw my winnings on Dream11?

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.

If the prize is paid in cash or kind, how should TDS be calculated?

The income tax on prize money from winning lottery, puzzles, card games, etc is a flat rate of 30%. For any prize in kind such as 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 prize in cash and market value of prize in kind.

I have received TDS Certificate for my winnings from playing poker online. How can I claim TDS Credit?

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 TDS Return and issue 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 on such income.

Got Questions? Ask Away!

  1. 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!

  2. 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:

    1. Fees for professional services
    2. Fees for technical services
    3. Any remuneration or fees or commission by whatever name called paid to a director ( other than salary)
    4. Royalty
    5. Any sum referred to in clause (VA) of section 28.

    Hope this helps!

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