TDS on Winnings from Horse Races
Introduction
Tax is deducted at source (TDS) at 30% under section 194BB on winnings from horse races (excluding online games). TDS is deducted at the time of payment.
Applicability of TDS
- Deductor:A book-maker or a licensee authorized by the government to conduct horse racing or betting at a racecourse.
- Deductee:Any resident or non-resident recipient.
- Threshold Limit:Tax is required to be deducted only if the amount of winning is more than 10,000 in respect of a single transaction.
- Timing of Deduction:TDS is deducted at the time of payment.
TDS Rates
- Standard Rate:30% (without surcharge or cess for residents).
- For Non-Residents:The rate is increased by the applicable surcharge and cess.
Compliance Requirements
- Nil or Lower Deduction Certificate:Not available for TDS on winnings.
- TDS Deposit:TDS must be deposited within seven days from the end of the deduction month, except for March, which is due by April 30. Government offices depositing TDS without a challan must deposit the TDS on the same day on which the tax was deducted.
- TDS Statements:Quarterly TDS statements must be filed using Form 26Q.
- TDS Certificate:Form 16A must be issued within 15 days from the due date of the TDS return.
Penalties for Non-Compliance
- Failure to Deduct/Deposit TDS:Liable for interest under Section 201 and penalty under Section 271C.
- Late Filing of TDS Statements:Fee of Rs. 200 per day under Section 234E, plus penalties under Sections 271H and 272A.
- Failure to Issue TDS Certificates:Subject to penalties under Section 272A.