The whole world is well aware of the remarkable games shows and lottery games in India. Some of those famous game shows are Kaun Banega Crorepati, Indian Idol, Dance India Dance, Big Boss, Nach Baliye, and the list goes on. These shows offer tremendous prizes in real money or big prizes such as cars, houses, or gold.
This type of prize money or gifts acquired are liable for taxes, and TDS is deducted before paying off the money in lottery games, dance shows, or game shows. Even the dance contests, online gaming zones, test shows, or some occasional giveaways offer great winnings and taxes as well. If you ever win a game or lottery, what will come to your mind? The ways to spend a considerable amount or fulfill your dreams, right? But what you must think of is a way to assess the amount you will give off as a tax. As all such payments and gifts are liable for tax payments.
Let’sLet’s have a deeper look into the amount of money given off in tax on winnings of game shows and lottery tickets!
The TDS on Winnings
According to the 194B section of the personal duty act, in India, all rewards far beyond Rs 10,000 will be dependent upon a TDS of 30%. However, in case of overcharge, the applicable rate will be 31.2%. Given that, the TDS should be deducted by the organization or association itself before giving away the prize cash. Moreover, the payments from the following sources will be dependent upon a level TDS of 31.2%: Game Shows or any online show, betting, internet gaming riddles, race bettings, and also taxes on Indian lottery winners.
Major Points to Focus On
- No Deductions on Wins: Normally, citizens can guarantee derivations under Section 80D or 80C to decrease the available pay and henceforth charge obligation. No such allowances can be professed to diminish the rewards. A TDS of 31.2% is set independent of the subsidies you are qualified for.
- TDS, No Tax Refund: Normally, the citizens are dependent upon an assessment discount on the off chance that the TDS partition is more than their duty obligation for a specific financial year. Notwithstanding, on account of such rewards, citizens can’t guarantee any discount against this TDS sum.
- The Monthly Income: The personal expense on your standard pay would rely upon the tax bracket you belong to. All of the rewards from game shows or lottery draws in a TDS of 31.2% that are non-refundable. In this way, regardless of whether you come in the nil section or the most elevated 30% tax bracket according to your available pay, every one of the rewards will draw in a level TDS of 31.2%.
For the gifts such as a vehicle or a cheque, a TDS of 31.2% should be paid by the recipient before taking ownership of such a gift. For example, if you have won a vehicle worth Rs 5,00,000 in a draw, you should pay a TDS of 31.2% on the car, which is 1,56,000.
Tax Liability on Other Income
For tax purposes, the payments from such game shows are taxed independently of the remainder of the pay. Hence, the responsibility for the remainder of the payment is determined independently according to the available pay, personal expense, and allowances. Let’sLet’s consider Ravi winning a quiz show and a hefty amount of Rs 5,00,000, and his monthly pay is Rs 15,00,000. His tax in that year will be divided into two parts. The first is the TDS on rewards under segment 194B, of Rs 1,56,000 (5,00,000 X 31.2%). According to his tax bracket, the subsequent will be his expense obligation on his available pay of Rs 15,00,000. The rewards from such quizzes, game shows, lotteries, and dance shows go under “Pay from Other Sources” in your expense forms. While you need to give up 31.2% of your profit if that exceeds a minimum of Rs 10,000, and then again, if the monthly income exceeds it, the tax is again deducted.
Krishna Murthy is the senior publisher at Trickyfinance. Krishna Murthy was one of the brilliant students during his college days. He completed his education in MBA (Master of Business Administration), and he is currently managing the all workload for sharing the best banking information over the internet. The main purpose of starting Tricky Finance is to provide all the precious information related to businesses and the banks to his readers.