As we all aware that, if the assessee received any income by way of winnings from any lottery or crossword puzzle or card game and the amount is in excess of Rs 10,000 then it will be covered under scope of section 194B. As per section 194B tax need to be deducted at flat 30% plus cess of 4% i.e at 31.2%.

Extract of Section 194B

Winnings from lottery or crossword puzzle.

194B. 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 ten thousand rupees shall, at the time of payment thereof, deduct income-tax thereon at the rates in force:

Provided that in a case where the winnings are wholly 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.”

While filing your income tax return you must include prize money under ‘income from other sources’ and, you must submit the TDS certificate as proof that you have paid all the tax due against the prize money.

Taxation on prizes in kind

A multitude of game/talent shows opt for a combination of cash and kind. The tax liability on cash prizes can be arrived at by a simple calculation, but this is not the case with prizes in kind. Although the applicable tax rate is the same, that is, 30 per cent, it poses a challenge on two fronts — who bears the tax liability and what is the valuation of the prize?

“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.

Say, you win a car with a market value of Rs 7 lakh and the conditions require you to bear the tax liability. You will have to cough up Rs 2.1 lakh tax, and Rs 6,300 education cess. Then there are registration charges, road tax, octroi and insurance, which must be borne by the winner. The only alternative: Forego your award.

Guidelines for valuing prizes, including holidays, insurance products and even contracts awarded by channels to winners, are unclear. The valuation will be largely circumstantial. For instance, to value a holiday, you may have to consider how much it costs an unrelated third party.

Republished with Amendments

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70 Comments

  1. Kiran Tilokchandani says:

    A member won a gift of Rs.1700 in october’2019 & then he won gift of Rs.2,00,000 on which I deducted TDS. Now my query is whether I require to deduct TDS on Rs.2,00,000 + Rs.1700 or only on Rs.2,00,000

  2. PRAKASH POTLURI says:

    I am from Andhra Pradesh, and now I am interested to buy the lottery tickets. I am planning to buy the lottoland.asia is this right or not? please guide me anybody.
    And which one right for me.?

  3. Sammar says:

    I have a query in TDS deducted for cricket bet winning

    For winning of amount 50000 in Dream11 (Cricket Betting), TDS @ 30% equal to Rs15000 has been already deducted instantly.

    But i have many more losses in Dream11 such that my net income from winning in Dream11 during year 2019-20 is in negative.

    Can i get refund of Rs15000 TDS deducted during my IT return.

    Your quick response shall be appreciable.

    Thank you,

  4. Sammar says:

    I have a query in TDS deducted for cricket bet winning

    For winning of amount 50000 in Dream11 (Cricket Betting), TDS @ 30% equal to Rs15000 has been already deducted instantly.

    But i have many more losses in Dream11 such that my net income from winning in Dream11 during year 2019-20 is in negative.

    Can i get refund of Rs15000 TDS deducted during my IT return.

    Your quick response shall be appreciable.

    Thank you,
    SAM

  5. Muhammed Roshan says:

    Hi Sir,
    I am playing a betting game and i have totally won almost 3 lac and i have recharged an amount of 2.3 plus lac to the game..Should i be required to pay tax ?
    My annual income is 4 lac.
    Please also let me know it would be okay to withdraw a sum of less than 10k at a time to avoid tax or issues ?

  6. Kalpesh vernekar says:

    I won a lottery from my team 11 cricket game and I received a tax deduction.They have sent me tds certificate now I want to claim it how I can do that.Pkease guide me in this

  7. Yuvraj Bhandari says:

    Hi Sir,

    Need you support to solve TDS tax on poker online gaming. as money deposit and withdrawal below.

    1. January Month deposit 50K, won 27K and all withdrawal 77K tds on 27k deducted 30%+

    2. Feb Month deposit 75K and Lost 45K and withdrawal 30K tds on 0 as it was loss.

    3. March Month deposit 40K and withdrawal 85K tds now the company deducted tds on 45K but i have already loss in same company Feb Month 45K??

    I just want to clarify the TDS have to be deduct on 45k or Nil . Pls confirm??

    Best Regards, Yuvraj

  8. Ankur mehan says:

    Sir,
    I have a poker account and won 24000 approx.
    They say if i transfer the said amount in once.. then they will deduct tax 30%. But if i transfer less than 10000 two times nd balance in third time. then no tax…. Is this correct.

  9. Smaecghai says:

    Consider I get 20lakh amount in my bank account through gambling. And I am ready to show this amount as income from other source in order to pay 30% tax. My question is that will IT dept or bank ask me proof of income source? Or will I be punished

  10. Mubeena says:

    I won Rs.1250000/- in a TV Game show.How much percentage of tax will be deducted from this amount?
    Can I file ITR for the tax return?
    Because I am house wife,i dont have any income.And also my husband’s yearly salary is below 350000/-
    Is it possible to return the tax amount ??

  11. srinath says:

    if i won international lottery above 10crores (inr),and also I have nre account in India. I have to pay any tax to India government of this prize money.

  12. Raja says:

    Hello Sir,
    I have a query. I have deposited a total of 4.5 lac into various online poker accounts and withdrawn around 6 lac. My net income or winning stands at 1.5 lac. But this included tournament wins of around 4.5 lac for which TDS of 1.5 lac was deducted, leaving tournament winnings at 3 lac. Rest of the money i won from cash tables. As my net income or winning is 1.5 lac (6 lac-4.5 lac) can i file for itr as tax should only be applicable on 1.5 lac and not on 4.5 lac. Please respond.

  13. Dhanu says:

    Dear Sir

    i am win the bike worth Rs. 139039/-, deduct the tds Rs. 43380/-. Not any other income have earn in financial year. please guide me. It is possible to refund tds amount Rs. 43,880/- from income tax department

  14. kannan says:

    i won car((200000L worth) in a game show, as per norms i paid 30% of tax 60000 thousand.
    my annul income as per salary 3L.

    is there possible file ITR ???

    pls guide me how to claim ???

  15. chandra rao says:

    Sir one of my friend got 6 lakhs from game show and they deducted 184500 rs towards tax and he got salary 150000.when returns submitting he showned 6 lakhs in othe sources of income.it is showing as refund 121000 rs .is it correct.
    please explain

  16. Manoj says:

    Hello, I have some winnings from Playing Poker of about 60K this year But no other income. The amount received is already Taxed at Source of 30.09%. Should I STILL file ITR for me as I have no other income but only online winning of 60K which has been already taxed anyway? Please help me with this query?

  17. MAHAMMADRAFIK says:

    I GOT SMS FROM INDIAN TRUSTED WALLET COMPANY. I HAVE WIN CAR OR EQUAL WORTH OF MONEY AFTER REGISTRATION.(REGISTRATION FEES RS6500/-)
    PAID THIS AMOUNT. COMPANY READY TO TRANSFER TO AMOUNT RS. 12,60,000/- FROM BANK .BANK MANAGER TALK WITH ME ABOUT THIS TRANSACTION. AND TOLD TO ME FOR RELEASE THIS AMOUNT NEED TO PAY TDS AMOUNT 1.5% (RS 18900/-) IS IT REAL OR FAKE. PLEASE CLARIFY

  18. Jagdish Singh Rawat says:

    Sir,
    I paid TDS Rs 65400/-on lucky draw.I am salaried govt employee.while filing itr-1 can I show the amount in(income from other sources colmn).Kindly advice

  19. Ram says:

    I won an apple laptop worth rupees 2,00,000 in a contest conducted by eBay they asked me to pay 30 percent tax what will they do with this amount and can I pay after receiving the prize

  20. Shri says:

    I won a prize for 10 lakhs in draw and I received the amount credited to my account on July 2016. I’ve read somewhere that I’ve to pay 30% tax for this while filing TDS in 2017. Am I right. Need your comments on this

  21. Tirthankar Bhattacharjee says:

    I was won the game show, and prize money is 89000/- and tds deducted from prize money 30% U/s 194B. I have no other income. Can I refund it when i am filling my income tax return

  22. naidu says:

    in the last two months i have lost almost Rs.50000/- on rummycircle.com by playing games. but yesterday i won the game prize of Rs.16200/- but immediatly they were deducted Rs.4260/as tds. am i eligible to get back the tds because the net gain is not positive so far. please reply

  23. M.PRASADA RAO says:

    If a person win Rs. 5 lacs in lottery. He don’t have PAN No. then what would be the taxliability? it is for 30% or more.

    I am waiting for your advise.

  24. deepak says:

    TDS is deductable on winnings over 10000 …. there is no clerification whether it is during the year on transaction to transaction basis….plz clerify

  25. Mohit Chaturvedi says:

    If an insurance agent wins a prize from lic for his good performance and competence the is it covered in this section or not?

  26. Navin Chaudhry says:

    Hi.
    I have recently won a shop of Rs. 21 lacs from a radio station SMS contest. The builder is asking me to pay Income Tax upfront on account of 30% award money and service tax. The prize will be only given to me if I deposit the “income tax” to the builder, in the form of an Allotment Letter. The property has not yet been constructed and the basement construction has just begun. Through this promotion the builder has already created it’s brand value and booked the shops and other flats in other projects.
    I want to be guided on what is right process of claiming this prize and especially when I am unable to pay upfront Rs. 6.3lacs and service tax.
    Regards
    Navin Chaudhry

  27. ishan says:

    If price in kind is worth of 300000/- and suppose I cant bear the tax liabilities or other formalities and I company suggest to sell the price in auction at 250000/- then at which value my TDS shoul be deducted either 300000/- or 250000/-?? Please give me answer I shall be grateful to u

  28. maheswar reddy says:

    As per the details provided in form 16 A, TAN of the deducter, and section under which TDS is deducted to be mentioned in ITR.
    Income from other sources will be 13k which is inclusive of TDS amount so deducted.

  29. Kaushal Prabhu Patil says:

    As per the details provided in form 16 A, TAN of the deducter, and section under which TDS is deducted to be mentioned in ITR.
    Income from other sources will be 13k which is inclusive of TDS amount so deducted.

  30. Sriram says:

    I won a TV worth 13K in a lottery and I paid the relevant tax which is around 4K to get it. This is something related to the example you mentioned in your post. I got the Form 16A as well. Do I need to fill all these details in my ITR1? What is the value I need to fill under “Income from other sources”

    Getting some confusing responses from my mates. Please share the exact info.

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