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- Updated On : June 25, 2025
TDS on Lottery Winnings – Section 194B
Section 194B of the Income Tax Act mandates the deduction of TDS on income earned from lottery winnings, game shows, puzzle contests, or other similar sources. The purpose of this section is to ensure upfront tax collection on windfall gains that are otherwise irregular and not part of regular taxable income.
Applicability of Section 194B
This section applies to any person or organization responsible for paying winnings from lottery, crossword puzzles, game shows, or similar contests to a resident individual. TDS must be deducted before making the payment. Learn more about how TDS works in India.
Threshold Limit
TDS under Section 194B is applicable when the winning amount exceeds ₹10,000. If the winning is below this limit, no TDS deduction is required. Visit our Income Tax Calculator to estimate your post-TDS earnings.
Rate of TDS
- Flat Rate: 30% (plus applicable surcharge and cess if the payer is responsible)
- No benefit of slab rate, deductions, or exemptions is available on this income. You may read about exemptions under Section 10 for comparison.
Time of Deduction
The tax should be deducted at source at the time of payment or before disbursal of prize winnings, whichever is earlier, as is the norm with TDS on salary.
Grossing Up of Prize Money
If the prize is paid in kind (e.g., a car or a trip), or partly in cash and kind, the payer must ensure tax has been paid on the total value. If the tax is borne by the payer, the amount needs to be grossed up accordingly. Refer to Section 194BB for similar TDS rules on horse race winnings.
Examples
- Example 1: A person wins ₹1,00,000 in a game show. TDS of ₹30,000 will be deducted and only ₹70,000 paid to the winner.
- Example 2: A contestant wins a car worth ₹8 lakhs. The organizer must deduct or pay tax of ₹2.4 lakhs (30%) before handing over the car.
Reporting & Compliance
- TDS must be deposited to the government by the 7th of the following month.
- Deductor must file TDS return in Form 26Q and issue Form 16A to the winner. Refer our e-filing guide for step-by-step help.
Internal Links for Further Reference
Frequently Asked Questions – TDS on Lottery Winnings (Section 194B)
Section 194B mandates TDS on winnings from lotteries, game shows, puzzles, and similar sources exceeding ₹10,000.
The TDS rate is 30% on the entire winnings amount if it exceeds ₹10,000.
TDS applies if the total winnings from a single source exceed ₹10,000 in a financial year.
Yes, online game show or quiz winnings are subject to TDS under Section 194B if they exceed ₹10,000.
Yes, TDS is applicable even on non-cash prizes. The recipient must pay the tax before claiming the prize.
The person or entity paying the winnings is responsible for deducting and depositing the TDS.
Yes, you can claim refund while filing ITR, but no deductions are allowed against such income.
No, each winning is considered separately for checking the ₹10,000 threshold limit.
Yes, if the prize is won in India or from an Indian company, TDS under 194B is applicable.
No, the prize cannot be handed over unless the applicable TDS has been paid or deposited.
No, winnings are taxed at a flat rate and cannot be adjusted against losses from other sources.
They may be treated as assessee-in-default and penalized by the Income Tax Department.
No, even if paid in parts, TDS is applicable on the full amount if it exceeds ₹10,000.
Declare it under "Income from Other Sources" and match TDS details with Form 26AS.
Yes, surcharge and health & education cess are applicable over the basic 30% TDS, based on income level.