## Section 194BB — TDS on Winnings from Horse Race

### Key Rule

Where a bookmaker pays winnings to a punter from horse race betting:

→ TDS u/s 194BB is deducted on the FULL amount of winnings.

→ Losses are NOT to be set off before deducting TDS.

### Logic

Each race/winning is treated as a separate transaction. The gross winnings figure determines TDS — netting against losses is not permitted at the TDS stage.

This aligns with the general principle that casual incomes (lottery, races, etc.) are taxed at a flat rate of 30% with no set-off of losses.

Worked example

### Example 1

Example: A punter places bets at a horse race:

Winnings from Race 1: ₹2,00,000
Losses in Race 2: ₹70,000
Net winnings paid by bookmaker: ₹1,30,000

Analysis: Bookmaker must deduct TDS u/s 194BB on ₹2,00,000 (gross winnings), NOT on the net ₹1,30,000.

TDS = 30% × ₹2,00,000 = ₹60,000 (subject to threshold of ₹10,000).

⚠️ Common exam mistakes

Netting losses against winnings before computing TDS u/s 194BB.
Applying TDS only on cash actually paid out, ignoring the gross winnings figure.
Confusing 194BB (horse race) with 194B (lotteries/crosswords).

Bare-Act text Section 194BB · Income-tax Act, 1961 · click to expand

Bookmaker pays to punter winnings from Horse Race → TDS u/s 194BB will be deducted on full amount, Losses will not be set off before deducting TDS.

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Section 194BB - TDS on Winnings from Horse Race

Worked example

⚠️ Common exam mistakes