Section 194B of the Income-tax Act currently mandates the deduction of income tax at source on winnings from lotteries, crossword puzzles, card games, and other forms of gambling when the aggregate amount exceeds Rs. 10,000 during a financial year. The proposed amendment under the Finance Bill 2025 seeks to remove the aggregate threshold and instead apply tax deduction on a single transaction exceeding Rs. 10,000. This change aims to simplify the process and ensure tax is deducted on individual winnings over the specified limit. The amendment is set to take effect from April 1, 2025, and will impact how tax is deducted on such winnings going forward.
Budget 2025: Section 194B – Winnings from lottery or crossword puzzle
Section 194B of the Act requires that any 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 or from gambling or betting of any form or nature whatsoever, being the amount or the aggregate of amounts exceeding Rs. 10,000/- during the financial year shall, at the time of payment thereof, deduct income-tax thereon at the rates in force
2. It is proposed to remove the condition of threshold applying on aggregate of amounts exceeding Rs. 10,000/- and to now instead apply in respect of a single transaction.
3. This amendment will take effect from the 1st day of April 2025.
[Clause 54]
Extract of Relevant Clauses of Finance Bill, 2025
Clause 54 of the Bill seeks to amend section 194B of the Income-tax Act relating to winnings from lottery or crossword puzzle, etc.
The said section provides that 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 or from gambling or betting of any form or nature whatsoever, being the amount or the aggregate of amounts exceeding ten thousand rupees during the financial year shall, at the time of payment thereof, deduct income-tax thereon at the rates in force.
It is proposed to amend the said section so as to provide that tax will be required to be deducted at source under this section when the amount exceeds ten thousand rupees in respect of a single transaction.
This amendment will take effect from 1st April, 2025.
Extract of Relevant Amendment Proposed by Finance Bill, 2025
54. Amendment of section 194B.
In section 194B of the Income-tax Act,
(a) for the words “or the aggregate of amounts”, the words “in respect of a single transaction” shall be substituted;
(b) the words “during the financial year” shall be omitted.
