Section 194B and 194BB – TDS on winnings from lottery or crossword puzzle and TDS on winning from a horse race.

Continuing the series of TDS articles, in the present article, both the Section 194B and Section 194BB relating to TDS on winnings from lottery or crossword puzzle and TDS on winning from horse race, respectively, are covered.

Understanding the scope of Section 194B –

The Scope of Section 194B is summarized hereunder –

  • Any person making payment of winning amount to any person is responsible for deducting TDS thereon.
  • Winnings from a lottery, crossword puzzle, card game, and any other game is covered within the scope of section 194B.
  • TDS is to be deducted if the aggregate amount exceeds INR 10,000.
  • When the winning amount is payable in kind or is partly payable in cash and partly in kind. Then, in that case, it is the Deductor’s responsibility to ensure that the TDS has been paid before releasing the winning amount.

Understanding the scope of Section 194BB –

  • Any bookmaker or the person to whom Government has granted a licence for horse racing in any race course or for arranging for gambling or betting in any race course is liable to deduct TDS while making payment of the winning amount.
  • TDS is to be deducted if the aggregate amount exceeds INR 10,000.

Time of TDS deduction –

The Deductor liable to deduction TDS under section 194B and / or Section 194BB is required to deduct TDS at the time of payment.

Basic Threshold Limit –

The basic threshold limit applicable to both the section 194B and 194BB is INR 10,000 i.e. if the aggregate amount exceeds INR 10,000 only than TDS is to be deducted.

Rate of TDS under Section 194B and Section 194BB

Section 194B TDS rate and Section 194BB TDS rate is same. The Deductor would be liable to deduct TDS @ 30% under both the sections.

Frequently Asked Questions (FAQ) –

What is Section 194B?

Section 194B contains provisions relating to deduction of TDS on winnings from lottery or crossword puzzle or any other game. The Deductor is required to deduct TDS @ 30% if the winning amount exceeds INR 10,000.

What percentage of TDS is deducted?

TDS is deducted @ 30% in case the provisions of section 194B and / or section 194BB relating to winning from lottery or crossword puzzle or any other game and / or winning from horse race are attracted.

Is income from horse racing taxable?

Yes, the income from horse racing is taxable, and if the winning amount from horse racing exceeds INR 10,000, the winner will receive the winning amount after TDS deduction.

Also Read-

Particulars
TCS – Tax Collection at Source – A Complete Guide
TDS Rate Chart for Financial Year 2019-2020
Section 192 – TDS on Salary
Section 192A – TDS on Premature withdrawal from EPF
Section 193: TDS on Interest on Securities
Section 194 – TDS on dividend
Section 194A: TDS on interest other than interest on securities
Section 194C – TDS on Contractors
Section 194D – TDS on insurance commission
Section 194DA – TDS in respect of Life Insurance Policy
Section 194E – TDS on payment to Non-resident Sportsmen or Sports Association
TDS under Section 194EE and Section 194F
Section 194G TDS on Commission on Sale of Lottery Tickets
Section 194H – TDS on Commission or Brokerage
Section 194I of Income Tax Act, 1961 – TDS on Rent
Section 194IA TDS on transfer of immovable property
Section 194IB – TDS on Rent paid by Individual / HUF
Section 194LA: Payment of Compensation on acquisition of certain immovable property
TDS under Section 194LB, 194LBA, 194LBB and 194LBC
Section 194LC: TDS on income by way of interest from an Indian Company or a business trust
Section 194LD TDS on income by way of interest on certain bonds and Government Securities
Section 194J TDS on Fees for Professional or Technical Services
Section 194N – TDS on Cash Withdrawals
Section 194M: TDS on Payment of certain sum by certain Individual / HUF
Section 195 TDS on payment of any other sum to a non-resident
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4 Comments

  1. RAJENDRA RATILAL SHAH says:

    I am physically handicapped having disability of 84%.working with lic of india.i am getting deduction of rs.125000 under sec 80u.my wife is also physically handicapped having disability of 82%.she is housewife totally depending on me.please tell me whether I can claim deduction under sec.80dd for rs.125000

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