Section 194BB TDS on winnings from race horses

Section 194BB TDS on winnings from race horses

Section 194BB enjoins any person, who is a bookmaker or a licensee for horse racing in a race course or arranger for wagering or betting in any race course, and is responsible for paying to any person the winning from such horse race, to deduct income-tax at source. The deduction is to be done as per rates in force. The only exemption is for winnings of Rs.10,000/- or below.

Under this section TDS required to be deducted from prize money of winning from prize money of winnings from race horses. Income from horse races is taxed at a flat rate of 30% u/s 115BB of the Income Tax Act and TDS is deducted under section 194BB if the earnings aboveRs.10,000 at 30%.

Budget 2025, this threshold was Rs.10,000 for each individual (separate) transaction.

Nature of Payment – Winnings from Horse race

Threshold limit for TDS 

1. Amount or the aggregate amounts greater than (>) Rs. 10,000 in a Financial Year. 
• Or
2. Greater than (>) in a single transaction from financial year 2025-26.

Payer 

Booker maker or a person holding license for horse racing or for arranging for wagering or betting and race course

Payee

Any Person

Rate of TDS

30%

Time of deduction

At the time of payment

For example, 

Mr. Sandeep had won the game of wagering of horse races; prize was 10 lakhs TDS will be deducted at 30% on 10 lakhs TDS - Rs 3 lakhs balance amount which is 7 lakhs received by Mr. Sandeep.

Deposit of TDS

Tax deducted by an office of government

1. Without an income tax challan – deposit on the same day
2. With an income tax challan – deposit within 7 days from the end of the month in which the deduction is made. 

Other Deductors

1. If credited or paid in march – 30th march
2. Any other month – within 7 days from the end of the month in which the deduction is made

Quarterly Statement filing (Rule 31A)

Payer must submit a quarterly statement (Form 26Q) for tax deducted at source.

Qtr. Ending	Due date
30th June	31st July
30th September	31st October
31st December	31st January
31st March	31st May

Furnishing certificate of TDS (Rule 31)

From 16A – within 15 days from the due date for furnishing TDS statement.

Who is required to deduct TDS under section 194BB?

• As per this section, a person 
• who is a bookmaker or Turf accountant?
• Government license holder for organizing horse races, wagering, or betting
• What is the rate of TDS undersection 194BB?
• TDS rate under section 194BB is 30% plus surcharges. The deduction is made at the time of payment. No tax deduction will be required if the winning amount is within Rs. 10,000

For income from winnings from horse races

• No deductions allowed against expenses
• Losses Can be carry forward up to next 4assessment years from the assessment year in which the loss was incurred
• Losses can be set off against income from owning and maintaining race-horses only

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