What’s the TDS Rate on Winning from Lottery ,Crossword Puzzle or Horse Race under Income Tax Act is the question asked by few lucky people in India. Under the section 194B of income tax act, 1961, which deals with deduction of TDS in case of Winning from Lottery or Crossword puzzles, any person responsible for paying any amount as winning from following will attract TDS and the payer has to deduct TDS @ 30% if such amount is in excess of Rs. 10,000.
- Winning from Lottery
- Winning from Crossword puzzle
- Card games or
- Any other games
TDS under this section will be deducted at the time of payment.
If the prizes awarded are in kind, the prize distributor will, before releasing the prize, ensure that tax has been paid in respect of the winnings. It will either recover it from the winner or bear the tax liability itself and deposit TDS. But if prizes are partly in cash and partly in kind, tax is deducted on the total value of the cash and kind from the cash. And, if the cash is insufficient to meet the TDS liability, either the winner or the prize distributor pays the deficit. This will depend entirely on the terms and conditions of prize scheme.
The payer should include the winning amount while filling income tax return under the head “Income from other sources” and calculate tax liability after taking credit of the TDS amount deducted from source.
TDS Rates on Winning from Horse Race under Income Tax Act 1961: Section 194BB
Section 194BB of Income Tax Act, 1961, deals with deduction of TDS in case of Winning from Horse races. Any person being licensed by the government or a licensed bookmaker who has been granted under any law for horse racing in any race course or for arranging for wagering or betting in any race course, who is responsible for paying to any person any income by way of winnings from any horse race in an amount exceeding Rs. 5000 shall, at the time of payment thereof, deduct TDS @ 30%.
TDS needs to be deducted at the time of payment.
Time for Deposit of TDS:
- In case of deduction by or on behalf of Government, on the same day.
- other cases- within 1 week from the last day of the month of tax deduction.