As per Section 115BB, a flat tax rate of 30% is applicable on income arising by way of winnings from any:
- Lottery
- Crossword Puzzle
- Race including horse race (not being income from the activity of owning and maintaining race horses)
- Card Game and other game of any sort ( As per Section 24(ix) includes any game show, an entertainment programme on television or electronic mode, in which people compete to win prizes or any other similar games such as Kaun Banega Crorepati etc.)
- Gambling or betting of any form or nature
Applicability of TDS
As per Section 194B, TDS at the special rate of 30% is applicable if the amount of winning exceed Rs 10,000
- Lottery
- Crossword Puzzle
- Card Game and other game of any sort
- Gambling or betting of any form or nature
TDS on winning from horse race is deductible @30% if the amount of winning exceeds Rs 10,000 and covered by Section 194BB.
Winning in Cash
If the winning from lottery etc. is in cash and exceeds Rs 10,000 then the person responsible for paying such amount should deduct TDS @ 30% on the whole amount under section 194B (or 194BB in case of winning from horse race) before making such payment.
Winning wholly in Kind or partly in cash and Partly in Kind
If the winning is wholly in kind (such as car etc) or partly in cash and partly in kind then the person responsible for paying shall before releasing the winning ensure tax @ 30% has been paid in respect of such winning. The tax shall be calculated on the basis of the market value of the winning such as car etc. along with the winning in cash. Generally, the amount of tax or shortfall in tax is collected from the winner and deposited to the government by the organiser.
For Example1:
Mr .X win cash Prize of Rs. 15, 00,000 from lottery tickets on 27.06.2018. What will be the TDS amount?
Answer
TDS of Rs. 4,50,000 (i.e. 30% of Rs. 15,00,000) + Ed. Cess of Rs. 18,000 (i.e. 4% of Rs. 4,50,000) total of Rs. 4,68,000 will be deducted from prize amount and balance amount will be paid to the winner.