Under Section 194B of the Income Tax Act, 30 per cent tax is deducted on any prize money in excess of Rs 10,000 and other winnings from games, lotteries etc. This is deducted at source (TDS). A Three per cent education cess is payable on the tax amount.

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.

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38 responses to “TDS under section 194B on winning from Lottery”

  1. 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 ???

  2. 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

  3. TAXATION says:

    I won a programe madhyamam broad casting limited win Rs.5,00,000/- and TDS Rs. 1,50,000/- how can i file the return

    • p.simhalu says:

      can i claim the income tax which was deducted under section 194 B of the income tax for refund after taking other sources of income added with salary income

  4. 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?

  5. Deepak says:

    i won rs 5000 five time from on-line gaming total rs25000 winnings. TDS applicable or not for me

  6. 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

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