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Winning big on Kaun Banega Crorepati (KBC) seems like a dream but when this is achieved, it brings one to cloud nine. But, within all this happiness, one thing is important to know in India, the winnings from KBC or any similar game show are subject to taxation under the Income Tax Act. Have you ever thought about how much tax applies to KBC prize money? Let us discuss in detail.
As per Section 194B, any type of earnings from reality TV shows, lotteries, competitions, card games, etc., falls under “Income from Other Sources”. Thus, if the prize amount exceeds Rs.10,000, Tax Deducted at Source (TDS) at the rate of 30% + applicable surcharge is applicable.
This amount is deducted by the person who is responsible for distributing the prizing money. You are not eligible for any tax deductions or exemptions in this regard.
If the TDS exceeds your total tax liability (considering other income), you can claim a refund when filing your ITR. File here.
Section 115BB of the Income-tax Act governs the winnings by lottery, betting, gambling, crossword puzzle, card games or other games of any sort and the TDS on such income is liable to be deducted under Section 194B of the IT Act. As per this section, the person paying any such winnings exceeding Rs 10,000/- is required to deduct income-tax at 30%. In fact, considering the levy of 3% less on the amount of income-tax, the effective tax rate would work out to 30.9%.
Another important point which needs to be mentioned here is even in a case where a participant has no source of income at all and his prize money from a lottery or a game show is only Rs 1,00,000/- then also tax of Rs 30,900/- would still be levied on the same since no basic tax exemption or any allowance or deduction are eligible for set-off against such winnings.
If the winnings are wholly in kind, or partly in cash and partly in kind, and cash is not sufficient to meet the TDS liability, the person responsible for paying shall, before releasing the winnings, have to ensure that tax has been paid in respect of the winnings. Thus, don't be surprised if you have won a car as a prize for a game or a scheme and you are called upon by the organizer to deposit 30% of the car value towards TDS.
Further, every participant in shows like KBC have to sign the terms and conditions in which it is clearly mentioned as under:-
Any and all taxes and/or levies applicable on the prize money won by the Participant(s), under the laws of India shall be borne by the Participant(s) in relation to the prize. Payment of prize money to the Winner(s) shall be after deduction of all applicable taxes and levies and subject to providing the relevant documents as intimated by the Company and will be paid within the time stipulated by the Company.
Yes, winnings from KBC are taxable under Section 115BB of the Income Tax Act. The tax rate is a flat 30% on the winning amount, excluding cess and surcharge.
A flat 30% tax is deducted at source (TDS). Additionally, cess and surcharge (if applicable) will be added to the tax, bringing the effective tax rate to around 31.2%.
No, KBC winnings are considered income from other sources and are not eligible for exemptions or deductions under Sections like 80C or 10(10D).
Yes, you will receive a TDS certificate (Form 16A) from the organizer (Sony Entertainment or KBC) showing the amount of tax deducted.
The winnings from KBC would be subject to tax @ 30% (plus applicable surcharge and cess). There are no such prescribed slabs for taxation of income covered under the purview of section 115BB in case of different amounts of winnings through KBC.
