Basic exemption under section 58(4)

This discussion clarifies the tax treatment of horse racing winnings. Generally, a flat tax rate of 30% (plus cess, totalling 31.2%) applies to such winnings. Importantly, the basic exemption and other deductions are not typically available in this scenario. If Tax Deducted at Source (TDS) has already been applied to the prize money, your tax liability may already be settled, and you would primarily need to file your Income Tax Return (ITR).