Section 194B : TDS on Winnings from lottery or crossword puzzle etc., (Inserted by the Finance Act, 2023, w.e.f. 01-04-2023)
Introduction : In the context of the Income Tax Act of 1961 in India, “winnings” typically refer to income earned through activities such as lotteries, crossword puzzles, races, card games, gambling, betting, or any other kind of game of chance or skill. The taxation of winnings is covered under Section 115BB of the Income Tax Act.
Q.1 Who is responsible to deduct TDS under section 194B and When it shall be deducted ?
Ans. Payer & at the time of payment of such winnings
Q.2 Threshold Limit & Rate ?
Ans. Amount or Aggregate of amounts exceeding Rs.10,000 during the financial year
Q.3 Winnings Include ?
Ans. Winnings from any lottery, crossworld puzzle, card game, gambling or betting of any form or nature whatsoever
Q.4 Does it include online game ?
Ans. No, Provided further that nothing contained in this section shall apply to deduction of income-tax on winnings from any online game on or after the 1st day of April, 2023. For tax on winnings from online game, refer sec 115BBJ and for TDS applicability refer Sec 194BA.
Q.5 Does Sec 194B applicable for winnings from betting apps & sites ?
Ans. Yes, and the betting apps such as Parimatch, 1xBet, 22bet, Betwinner, Melbet, Megapari, 10Cric, Betway, Rajabets.
Q.6 Does Sec 194B applicable for winnings from Dream 11, My 11 Circle, Rummy Apps etc.?
Ans. No, It is a game of skill and it is online. Hence Sec 115BBJ is applicable.
Q.7 Can we claim any deductions & exemptions from such winnings?
Ans. No, We cannot claim on income form such winnings. We have to discharge the applicable taxes including taxes on other income after claiming deductions & exemptions on such other income if any.
Conclusion: Navigate the intricacies of Sec 194B with confidence, armed with a clear understanding of TDS on lottery and game winnings. This guide offers detailed insights into rules, exemptions, and applicability, ensuring informed compliance with the dynamic tax regulations in India.
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Applicable TDS rate u/s 194B is 30%