Section 115BB of the Income Tax Act, 1961 – Tax on winnings from lotteries, crossword puzzles, card games, and other games of any sort or gambling or betting:

“Where the total income of an assessee includes any income by way of winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever, the income-tax payable shall be the aggregate of—
(a) the amount of income-tax calculated on such income at the rate of 30%, and
(b) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of such income.”

Rate of Tax:

• Flat 30% on the gross winnings (without any basic exemption limit).

• Surcharge and cess (currently 4%) are added to the 30% tax.

• No deduction of expenses or allowances is permitted against such income.

• No benefit of slab rates or chapter VI-A deductions (like 80C, 80D, etc.) on this income.

TDS Deduction – Section 194B:

“If the winnings from lottery or game show or puzzle exceeds ₹10,000, the payer shall deduct TDS @30% before making the payment.”

• For cash winnings, TDS is deducted directly.

• For non-cash winnings (like car, bike, etc.), the winner must pay tax equivalent to the fair market value of the prize before claiming it, or the provider pays it on their behalf (grossing up required).