The provisions relating to TDS on winnings from lotteries, crossword puzzles, card games and other similar activities have been restructured under the Income-tax Act, 2025. The earlier Section 194B of the Income-tax Act, 1961 is now covered under Section 393(3) [Table: Sl. No. 1], effective from 1st April, 2026.
This restructuring retains the provisions relating to deduction of tax at source on winnings from specified activities, while continuing the same rate and applicability conditions.
Quick Reference – Section Mapping & Reporting
- New Section (IT Act 2025): Section 393(3)
- Table Reference: Table: Sl. No. 1
- Nature of Payment: Winnings from lottery, crossword puzzles, card games, gambling or betting
- Earlier Section (IT Act 1961): Section 194B
- Return Form: 26Q and 27Q
- Code (for return filing):
- 1058 – Winnings (general cases)
- 1059 – Winnings in kind / insufficient cash (Note 2 cases)
Applicability of TDS
TDS is required to be deducted on income arising from winnings from:
- Lottery
- Crossword puzzles
- Card games and other games of any sort
- Gambling or betting of any nature
Threshold Limit
- ₹10,000 per transaction
TDS is required to be deducted only when the amount of winnings exceeds ₹10,000 in a single transaction.
Deductor and Deductee
Deductor:
- Any person responsible for distributing winnings or prize
Deductee:
- Person receiving such winnings
Time of Deduction
TDS shall be deducted:
- At the time of payment of winnings
Rate of TDS
- 30% on winnings
- No basic exemption limit applies
Nature of Winnings
Winnings may be in:
- Cash
- Kind
- Partly in cash and partly in kind
- In cases where winnings are wholly in kind or partly in kind and the cash component is not sufficient to meet the TDS liability:
- The tax must be paid before releasing such winnings
- The deductor shall ensure that tax has been deposited in respect of such winnings
- Fair market value of the prize shall be determined for computing TDS
Important Points
- TDS shall be deducted on net winnings, after considering any commission or bonus paid to agents
- No deduction of expenses is allowed to the recipient while computing such income
- The income is taxable at a flat rate and is not subject to slab rates
Additional Applicability for Non-Residents (As per IT Act 2025)
| Code | Nature of Payment | Previous Section (IT Act 1961) | New Section Reference | Rate | Remarks |
|---|---|---|---|---|---|
| 1058 | Any income by way of winnings from lottery, crossword puzzle, card game or any other game, or gambling or betting of any form or nature whatsoever | Section 194B | 393(3) [Table: Sl. No. 1] | 30% | Standard winnings |
| 1059 | Any income by way of winnings as above where consideration is in kind or cash is not sufficient to meet tax liability and tax has been paid before such winnings are released | Section 194B | 393(3) [Table: Sl. No. 1 – Note 2] | 30% | Winnings in kind / insufficient cash component |
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