How much tax do I pay if I win a lottery or a game show prize

Question

I recently won a prize in a televised game show and I want to know how much tax will be deducted before I receive the money. I would like to understand which provision governs this, what it entitles me to, and how long I have before the remedy lapses. I also want to know whether I need a lawyer for this or can do it myself.

MyVakeel Legal Desk · Accepted Answer

In India, the answer to "How much tax do I pay if I win a lottery or a game show prize" turns on Income-tax Act, 1961, Section 115BB, Income-tax Act, 1961, Section 194B and Income-tax Act, 2025. The points below set out the position and then what to do about it, in the order it should be done.

Section 115BB of the Income-tax Act, 1961 taxes winnings from lotteries, crossword puzzles, card games, other games of any sort, and game shows at a flat specified rate, without allowing any deduction for expenses incurred to earn such winnings, and without the benefit of the basic exemption limit or any Chapter VI-A deductions being available to reduce this specific income.

Section 194B requires the person responsible for paying such winnings to deduct TDS at the time of payment if the winnings exceed a specified threshold, and where the prize is wholly or partly in kind, such as a car or gadget, the person distributing the prize must ensure tax is paid on the winnings, often by requiring the winner to pay the applicable tax amount before releasing the prize, or by paying the tax themselves and grossing up the value.

Since Section 115BB winnings are taxed at a flat rate on the gross amount, you cannot set off any loss from another head of income, or any specific expenditure incurred while participating in the game or contest, against this income, and this flat-rate income is also excluded when computing whether you are liable to pay advance tax under the general threshold, though the TDS deducted is treated as advance tax paid.

The TDS deducted under Section 194B is reflected in your Form 26AS and should be claimed as credit while filing your return, and you must still separately report the gross winnings and the flat tax computed under Section 115BB in the applicable schedule of your income tax return.

What to do next: 1) Confirm the TDS deducted from your winnings matches Form 26AS; 2) Report the gross winnings separately under Section 115BB in your return; 3) Do not attempt to claim any expense deduction against this income; 4) Retain the prize distribution letter or TDS certificate as proof.

If you are unsure whether your facts fall inside Income-tax Act, 1961, Section 115BB, that is worth checking with an advocate before you commit to a route, because switching later costs time. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in tax law.