Tds on prize won from running competition

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This discussion clarifies when Tax Deducted at Source (TDS) applies to prizes won in competitions. Generally, TDS is deducted at 30% (or 31.2% without a PAN) on winnings from lotteries and game shows exceeding certain thresholds. However, TDS is not applicable to prizes from running races or marathons organised for a cause, as these are not considered games of chance. Sportspeople may face a 10% TDS under Section 194J if prize money exceeds £30,000.

Avinash Jeevan Dsouza

Avinash Jeevan Dsouza (Querist)
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20 November 2023 Do we need to TDS on the prize won from the running competition

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 November 2023 TDS (Tax Deducted at Source): The payer or organizer of the lottery or game show is responsible for deducting TDS at the applicable rate before making the payment to the winner. They are required to deduct tax on the winnings and issue a TDS certificate to the winner.
In the case of winnings from horse races, TDS will be applicable if the amount exceeds Rs 10,000.
TDS Rate: The TDS rate for lottery winnings is 30% u/s 194B of the winning amount (plus applicable surcharge and cess). For game show winnings, the TDS rate is also 30% (plus surcharge and cess) unless the winner provides a valid Permanent Account Number (PAN), in which case the TDS rate is 31.2% (including surcharge and cess).

Avinash Jeevan Dsouza

Avinash Jeevan Dsouza (Querist)
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20 November 2023 Even for marathons, running races, conducted for a cause, anti-drug.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 November 2023 No TDS in such a case.
It's not a game of chance.
TDS applicable under section 194J at 10% for sports persons if prize money exceeds 30,000.

Avinash Jeevan Dsouza

Avinash Jeevan Dsouza (Querist)
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20 November 2023 Thanks for the explanation.

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