TDS rules relaxed for lottery, these other incomes: Budget 2025
Feb 1, 2025
Synopsis
Budget 2025: Now the Finance Minister has removed the aggregate threshold limit of Rs 10,000 for deducting TDS on Winnings from lottery or crossword puzzles and winnings from horse races and now it will apply in respect of a single transaction over Rs 10,000. Read below to know more about TDS on lottery, horse racing and crossword puzzle income.
Now the government has removed the aggregate threshold limit of Rs 10,000 for deducting TDS on Winnings from lottery or crossword puzzles and winnings from horse races and now it will apply in respect of a single transaction.
Both of these amendments are effective From April 1, 2025. This means now even if you win Re 1 from horse racing, lottery or crossword puzzles then TDS will be deducted from it.
Earlier the TDS threshold limit was checked in aggregate for a given financial year. Now it will be checked for a single transaction. For example: If earlier you had Rs 8,000, Rs 8,000, Rs 8,000 three lottery income then TDS would be deducted since the aggregate threshold was over Rs 10,000. Now the threshold is applicable for single transaction over Rs 10,000. So in this example now TDS will not be deducted.
Section 194B - TDS on Winnings from lottery or crossword puzzle
The Explanatory memorandum to Budget 2025 said, “It is proposed to remove the condition of threshold applying on aggregate of amounts exceeding Rs 10,000 and to now instead apply in respect of a single transaction.”
Section 194B of the Act requires that any person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, being the amount or the aggregate of amounts exceeding Rs 10,000 during the financial year shall, at the time of payment thereof, deduct income-tax thereon at the rates in force 2. It is proposed to remove the condition of threshold applying on aggregate of amounts exceeding Rs 10,000 and to now instead apply in respect of a single transaction. 3. This amendment will take effect from the 1st day of April 2025.
Section 194BB - TDS on Winnings from horse race
Section 194BB of the Act requires that any person, being a bookmaker or a person to whom a license has been granted by the Government under any law for the time being in force for horse racing in any race course or for arranging for wagering or betting in any race course, who is responsible for paying to any person any income by way of winnings from any horse race , being the amount or aggregate of amounts exceeding Rs 10,000 during the financial year, shall, at the time of payment thereof, deduct income-tax thereon at the rates in force.
It is proposed to remove the condition of threshold applying on aggregate of amounts exceeding Rs. 10,000 and to now instead apply in respect of a single transaction. This amendment will take effect from the 1st day of April 2025.
[The Economic Times]
