Section 194B - TDS on winning from lottery or crossword puzzle, etc. - Income Tax - Ready Reckoner - Income Tax

TDS on winning from lottery or crossword puzzle, etc. - Section 194B Deductor The person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle or card game and other game of any sort in an amount exceeding 10,000 rupees [Substituted by amendment in FA, 2023 , w.e.f., 01.04.2023] or from gambling or betting of any form or nature whatsoever, being the amount or the aggregate of amounts exceeding ₹ 10,000/- during the financial year shall, at the time of payment thereof, deduct income-tax thereon at the rates in force. Deductee Any person Time of Deduction At the time of payment. Where lottery or prize money etc. is paid in installments, the deduction of tax is to be made at the time of actual payment of each such installments. Rate of TDS 30%. No surcharge, education cess shall be added. Hence, TDS shall be deducted at basic rates. There is no provision u/s 194B for deduction of tax at a rate lower than the rate prescribed above. Notes:- No TDS shall be deducted where aggregate amount does not exceed 10,000 during a financial year. In a case where the winning are whole in kind; or partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of the winnings, the person responsible for paying shall, before releasing the winnings, ensure that tax has been paid in respect of the winnings. As per explanation (ii) to section 2(24)(ix) 'card game and other game of any sort' includes any game show, an entertainment programme on television or electronic mode, in which people compete to win prizes or any other similar game. No TDS shall be deducted on bonus or commission paid to agents:- If out of the winning amount of lottery etc. any bonus or commission is paid to lottery agents or sellers of lottery tickets, no income taxes to be deducted for that amount paid and tax will therefore be deducted after deducting such bonus and commission. W.e.f. 01-04-2023, The provisions pf section 194B are not applicable in respect of winnings from any online game. [Inserted by FA, 2023 ]