Section 194B: TDS on Winnings from Horse Races

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TDS shall be deducted on winnings from horse races.

1. Applicability: Winning amount needs to be more than Rs 10,000.
2. Deductor: Any person shall deduct the tax at the time of payment.
Any person, here means a book-maker or a person to whom a license has been granted by the Government for horse racing or arranging for wagering, betting in any race course.
3. Tax Rate: TDS at a flat rate of 30% shall be applicable on such income.
4. Nature of Win: Winning can be in form of cash or kind. TDS needs to be deducted on both these components. Market value of the prize needs to be assessed and TDS needs to be deducted on the assessed amount.
5. Points to Note:
a. Race-income other than horse races like camel races etc. is not covered by this section.
b. TDS to be deducted on gross wins and losses should not be set off while calculating the TDS amount.
c. Deduction/expenditure shall not be allowed on such income to the prize recipient.

˜Authored by – CA Anushka Saraogi˜

Useful guidelines to avoid common mistakes while submitting TDS Statements

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