TDS on Winnings

TDS on Winnings:

Old Act – 1961	New Act – 2025	Nature of Income	Rate	Threshold	New Section Code
194B	Section 393(3), Table Sl. No. 1	Lottery, crossword puzzle, card games & other games	30%	₹10,000	1059
194BA	Section 393(3), Table Sl. No. 2	Net winnings from online games	30%	No ₹10,000 threshold	1060
194BB	Section 393(3), Table Sl. No. 3	Winnings from horse races	30%	₹10,000	1062

1. Winnings from Lottery, Crossword Puzzle, Games etc. [Section 393(3), Table Sl. No. 1]

TDS is applicable on winnings from:

1. Lottery
2. Crossword puzzles
3. Card games
4. Gambling or betting
5. Game shows
6. Other games of any sort
7. Any other income of similar nature

Person responsible for deduction of tax under section 194BB

Section 194BB casts responsibility on the following persons to deduct tax at source –

• a bookmaker; or
• a person to whom a license has been granted by the Government under any law for the time being in force –

1. for horse racing in any race course; or
2. for arranging wagering or betting in any race course.

Rate of TDS:

30% TDS is applicable where the amount of winnings exceeds ₹10,000.

Prizes given partly in cash and partly in kind or wholly in kind:

• In such cases TDS shall be deducted on the aggregate amount of cash prize + value of the prize in kind.

• Where the cash prize is not sufficient to meet the liability for tax deduction in respect of the whole winnings, the payer before releasing the winnings shall ensure that tax has been paid in respect of such winnings.

2. Winnings from online games [Section 393(3), Table Sl. No. 2]:

TDS on winnings from online games:

• Any person responsible for paying to any person (whether resident or non-resident) any income by way of winnings from any online game during the financial year shall deduct income-tax on the net winnings in his user account, computed in the manner as may be prescribed, at the end of the financial year at the rates in force i.e., 30%.
• However, in a case where there is a withdrawal from user account during the financial year, the income-tax shall be deducted at the time of such withdrawal on the net winnings comprised in such withdrawal, as well as on the remaining amount of net winnings in the user account, computed in the manner as may be prescribed, at the end of the financial year.

Winnings wholly in kind or partly in cash or partly in kind:

Where the net 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 net winnings, the person responsible for paying shall, before releasing the winnings, ensure that tax has been paid in respect of the net winnings.

Example:

• Radha Krishna is participating in an online gaming account. He Deposits ₹1,00,000 and ultimately has net winnings of ₹3,00,000.
• TDS is not calculated on ₹4,00,000.
• TDS is calculated on the net winnings, subject to the prescribed computation mechanism.
• Now, Dream 11 will deduct TDS at the rate of 30% on the total amount i.e., ₹90,000 (3,00,000*30%).
• The TDS will be deducted at the end of the financial year, irrespective of whether Radha Krishna has withdrawn the amount or not.

3. Winnings from Horse Races [Section 393(3), Table Sl. No. 3]

TDS is applicable where a person responsible for paying the winnings is:

• a bookmaker, or
• a person holding a Government licence for:

Rate: 30%

Threshold: TDS applies where winnings from horse races exceed ₹10,000.

Quick Summary:

Particulars	Lottery / Games	Online Games	Horse Race
New provision	393(3), Table 1	393(3), Table 2	393(3), Table 3
Old section	194B	194BA	194BB
Rate	30%	30%	30%
₹10,000 threshold	Yes	No	Yes
Basis	Winnings	Net winnings	Winnings
Section code	1059	1060	1062