Section 194B — TDS on Lottery, Game & Prize Winnings (30%)
Updated: 3 June 2026 | Income-tax Act 2025 | Section 194B & 115BB
Section 194B: 30% TDS on lottery, crossword, card game winnings exceeding ₹10,000. No basic exemption applies — 30% flat from rupee one of prize. Online gaming (Section 194BA): 30% TDS with no ₹10K threshold. Prize in kind: organizer pays TDS before releasing prize.
30%
Flat 30% tax on all lottery, game show, and prize winnings — no deductions, no exemption limit.
TDS deducted at source by organizer. Online gaming (194BA): TDS on every winning, no ₹10K threshold. Horse races: Section 194BB. Report in ITR under "Income from Other Sources."
TDS deducted at source by organizer. Online gaming (194BA): TDS on every winning, no ₹10K threshold. Horse races: Section 194BB. Report in ITR under "Income from Other Sources."
Winning Income TDS — Section Comparison
| Type | Section | TDS Rate | Threshold |
|---|---|---|---|
| Lottery / crossword prize | 194B | 30% | >₹10,000 per prize |
| Card game / game show (offline) | 194B | 30% | >₹10,000 |
| Online gaming (Dream11, Rummy, etc.) | 194BA | 30% | No threshold (net winnings) |
| Horse race winnings | 194BB | 30% | >₹10,000 per race |
| KBC / reality show prize | 194B | 30% | >₹10,000 |
| Lucky draw prize | 194B | 30% | >₹10,000 |
Frequently Asked Questions
What is Section 194B and when does TDS apply?
Section 194B Income-tax Act 2025: TDS on winnings from lottery, crossword puzzle, card game, or other game of any sort. TDS rate: 30% flat on the entire winning amount. Threshold: TDS applies if winnings exceed ₹10,000 in aggregate per transaction (per prize). No threshold for online games (Section 194BA covers online games separately — 30% TDS from ₹0). Who deducts: the prize-giving entity (lottery organizer, TV show, casino, game organizer). Includes: KBC (Kaun Banega Crorepati), reality show prizes, bet winnings (horse race is different — Section 194BB), lucky draw prizes, card games. No deduction allowed: winner cannot deduct any expenses against lottery winnings. Tax rate: 30% + surcharge + cess. No benefit of basic exemption limit — TDS at 30% regardless of other income.
What is the tax rate on lottery winnings in India?
Income tax on lottery and prize winnings: Tax rate: 30% flat (Section 115BB). No slab rate applies — 30% from rupee 1. Plus surcharge (if applicable based on total income) and cess (4%). Effective rates: income up to ₹50L: 30% + 4% cess = 31.2%. Income ₹50L–₹1Cr: 30% + 10% surcharge + cess ≈ 34.32%. Income >₹1Cr: 30% + 15% surcharge + cess ≈ 35.88%. TDS at source: 30% deducted before prize is paid. Example: Win ₹1 crore in lottery. TDS = ₹30L (30%). You receive ₹70L. Final tax in ITR: if surcharge applicable, pay balance through ITR. No deduction: cannot reduce by 80C, 80D, or any other deduction against prize income. Prize in kind: TDS obligation — organizer must gross up value and deduct/pay TDS on FMV. Foreign lottery win: taxable in India if winner is Indian resident (30% rate).
How is TDS handled for online gaming winnings?
Online gaming TDS — Section 194BA (from April 1, 2023): 30% TDS on net winnings from online gaming platforms. Different from 194B: no ₹10,000 threshold for online games — TDS on every winning. Net winnings = total winnings − total amount deposited in the same platform/session. Online gaming platforms must deduct TDS: Dream11, MPL, Rummy, poker platforms, fantasy sports, skill games. Budget 2023 clarification: TDS when withdrawing from platform wallet or at end of financial year (even if not withdrawn). Non-skill game platforms (gambling sites): same 30% TDS. GST angle: online gaming also attracts 28% GST on contest fees (changed in 2023). Section 115BBJ: tax rate on online gaming net winnings — 30% flat (same as lottery). Can offset deposits paid during year against winnings.
Is TDS on horse race winnings different?
Horse race winnings — Section 194BB: Separate section specifically for horse race winnings. TDS rate: 30% flat. Threshold: ₹10,000 per race (same as lottery). Who deducts: bookmaker or the organizer of the horse race. Taxed under: Section 115BB (same as lottery) — 30% flat rate. No deduction for expenses. "Winnings from horse races" — covers: direct bets on horse races at race courses, totalisator winnings. Sports betting (other than horse racing): if online — Section 194BA / Section 194B. Cricket betting winnings (illegal gambling): technically taxable but enforcement is practical challenge. If TDS was not deducted (illegal platforms): still your obligation to disclose income and pay 30% tax in ITR under "Income from Other Sources." Undisclosed gambling income can attract penalties under Black Money Act.
What if the lottery prize is in kind or goods?
Lottery/prize in kind — TDS obligations: When prize is a car, house, vacation, or other non-cash item: Section 194B still applies. TDS must be paid before releasing the prize. Who pays TDS: prize organizer must pay TDS from their own funds (as prize-giver) if winner cannot pay TDS in cash — OR winner arranges payment. Grossing-up: if prize is ₹10L worth car: TDS = 30% of ₹10L = ₹3L. If organizer bears TDS: grossed-up = ₹10L / 0.70 = ₹14.28L, TDS = ₹4.28L. Winner collects Form 16B (TDS certificate) from organizer. ITR: winner reports FMV of prize as income, claims TDS credit in ITR. Cost basis for future sale: FMV at time of winning. Employer reward schemes (non-cash gifts): if from employer — Section 17(2) perquisite rules apply (not Section 194B) if employment relationship.
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