Section 194BB 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 need 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.
The Provisions of Section-194 BB towards Winning From Horse Race [ Section 194BB] are given below-
| Who is the taxpayer | Any person paying winning from Horse Races |
| Who is the recipient | Any person |
| Payment covered | Winning from Horse Races |
| At what time tax has to be deducted at source | At the time of payment |
| Maximum amount which can be paid without Tax Deduction | If the amount of payment is Rs.5,000 or less than Rs.5,000 |
| Rate of tax deducted at source | 30% plus surcharges, education cess and secondary higher education cess |
Thus, Rate of TDS on Payments of Winnings from horse race under section 194BB of Income Tax Act, 1961 is 30% plus surcharges, education cess and secondary higher education cess. Tax is to be deducted at the time of making payment. Thus if the prize is paid in installments, the deduction of tax shall be made at the time of each installment. (However keep in mind that the exemption limit of Rs.5000/- is per winning and not per payment).
Reference:
As Per Section 194BB, of the Income Tax Act, 1961-
Winnings from horse race.
194BB. Any person, being a bookmaker or a person to whom a licence has been granted by the Government under any law for the time being in force 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 [five thousand rupees] shall, at the time of payment thereof, deduct income-tax thereon at the rates in force.