TDS Provisions

TDS Provisions from Winning From Lottery

The 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 in an amount exceeding five thousand rupees shall, at the time of payment thereof, deduct income-tax thereon at the rate of 30%.

Therefore, no need to be deducted tax if the amount of winning from each lottery, crossword puzzle, card game, etc. does not exceed RS. 5,000.

Person Responsible : All Payers

Rate of TDS for the financial year 2009-10

• Rate of TDS @ 30% on winning from lottery, crossword puzzle, card game, etc.
• No surcharge, education cess and SHEC shall be added.

See: TDS Calculator for A.Y. 2010-11 w.e.f. 1-10-2009

Exemption Limit: Rs. 5,000

Time of Deduction of TDS : At the time of Payment and at the time of each such installments.

Time Limit for deposit of TDS :

• Within one week from the last day of the month of tax deduction.
• Where tax is deducted on behalf  of the Government, tax is to be deposited on t he same day, without any challan.
• As per new rule 31A the Government has to deposit the tax in the same manner and within the same time as applicable to other deductors. (which has been kept in abeyance)

TDS Returns

• In Form No. 26Q on or before 15th July, 15th October and 15th January for the first three quarters and on or before 15th June for the last quarter.
• New rule 31 A relating to filling of compliance statement in Form 24C and annual statement in Form 26Q giving details of each quarter has been kept in abeyance.

Time limit for issue of certificate of TDS : Form 16A one month from the end of the month during which tax has been deducted.

Payee declaration is not allowed

The Payee declaration for non-deduction is not admissible whether payee has no taxable income. In other words the payee has no option to give 15G & 15H as in the case of FD Interest Income.

See: How to avoid TDS on Fixed Deposit (FD)

TDS is to deducted only on the net amount of winning

Bonus or commission paid to lottery agent will be deducted to calculate TDS on winning from lottery. For Example: If Mr. A wins a lottery price of Rs. 50,000. A sum of Rs. 5000 is deducted forpayment to the lottery agent as bouns or commission. Tax will be deduction on Rs. 45,000 after deducting bonus or commission paid to agent.