Tax on Lottery, Game Show, and Online Gaming Winnings in India (FY 2025-26)

• Lottery, game show, crossword and card-game winnings are taxed at a flat 30% (31.2% with cess) under Section 393 (previously 194B), and the tax is deducted before you receive the prize.
• Online gaming winnings are taxed separately under Section 194 ((previously 115BBJ), with TDS under Section 393 (previously 194BA) on net winnings, and there is no ₹10,000 threshold here.
• No deduction, no basic exemption and no Section 156 (previously 87A) rebate apply to any of these winnings; the flat 30% is final and effectively non-refundable.
• Prizes in kind (car, gold, holiday) are taxed at market value, and the organiser must ensure the tax is paid before handing over the prize.
• The Income Tax Act, 2025 (effective 1 April 2026) renumbers these sections, but your FY 2025-26 return still uses the old numbers.

Winning a lottery, a television game show, or a real-money gaming app can change your bank balance overnight, but a slice of that windfall goes to the tax department before it ever reaches you. India taxes these winnings under their own special rules, kept separate from your salary or business income, and the rates are steep and unforgiving. This guide breaks down exactly how tax and TDS work on lottery, game show, crossword, card game, and online gaming winnings for FY 2025-26.

Not every kind of win is taxed under the same section, and mixing them up is the single most common reason people end up with a mismatch notice. The law now splits winnings into three broad buckets.

Lottery, crossword, card games and horse racing

Winnings from lotteries, crossword puzzles, card games, gambling, betting and horse races are charged to tax at a flat 30% (plus 4% health and education cess, an effective 31.2%) with no deductions and no basic exemption. Tax is deducted at source under Section 393 (previously 194B) for horse races, once winnings from a single source cross ₹10,000 in the financial year.

Online gaming: fantasy sports, rummy, poker apps

Winnings from online games are taxed at a flat 30% on net winnings under Section 194 (previously 115BBJ), effective from AY 2024-25. TDS is deducted under Section 393 (previously 194BA), and there is no ₹10,000 threshold here: tax applies on your net winnings from the very first rupee.

Game shows: KBC, reality TV

Prize money from game shows and reality television is treated like other lottery-type winnings, a flat 30% under Section 194 (previously 115BB), with TDS deducted under Section 393 (previously 194B) before the prize is paid out.

Across all three buckets, one rule never changes: no deductions under Sections 123, 126, etc., no basic exemption limit, and no Section 156 (previously 87A) rebate can be set against these winnings.

Here is how the core provision works for lotteries, crosswords, card games and game shows.

• As per section 393 (previously 194B) of the Income Tax Act, all the winnings over and above Rs 10,000 will be subject to a TDS of 30%. With CESS and surcharge, the effective rate will be 31.2%. This TDS is supposed to be deducted by the company or organisation distributing the prize money.
• Income from the following sources will be subject to a flat TDS of 31.2%: Game Shows or any such shows on electronic media; Online gaming; lottery (both online and offline); gambling (both online and offline); race betting; and puzzles (crossword puzzles).
• No Tax Refund on the TDS: Usually, the taxpayers are subject to a tax refund in case the TDS portion is more than their tax liability for a particular financial year. However, in the case of such winnings, taxpayers cannot claim any refund against this TDS amount.
• No Deductions on the Winnings: Usually, a taxpayer can claim deductions under Section 126 (previously 80D) or 123 (previously 80C) to reduce the taxable income and hence tax liability. However, no such deductions can be claimed to reduce the winnings. A TDS of 31.2% is charged irrespective of the deductions you are eligible for.
• The Income Earned: While the income tax liability on your regular income would depend on the tax slab you are part of, all the winnings from lottery and game shows attract a non-refundable TDS of 31.2%. Thus, whether you come in the nil bracket or the highest "30%" tax slab as per your taxable income, all the winnings will attract a flat TDS of 31.2%.

Also Read: Section 194A of Income Tax Act: TDS on Interest

Take a concrete case. Say you win ₹50,00,000 on a game show. The organiser deducts 30%, that is ₹15,00,000, at source and pays you ₹35,00,000. You then receive a TDS certificate in Form 131 (previously 16A), and the same entry shows up in your Form 168 (previously 26AS) and AIS on the income-tax portal. When you file your return, you report the full ₹50,00,000 under the head 'Income from Other Sources' and take credit for the ₹15,00,000 already deducted.

For tax purposes, income from such game shows is counted separately from the rest of the income. Thus, the tax liability on the rest of the income is calculated separately as per the taxable income, deductions, and the income tax slab. Let us understand this with an example. Let's assume Ravi won Rs 5,00,000 from a quiz show, and his income from his salary is Rs 15,00,000 after all the deductions. His tax outgo in that year will be in two parts. The first is the TDS on winnings under section 194B of Rs 1,56,000 (5,00,000 X 31.2%). The second will be his tax liability on his taxable income of Rs 15,00,000 as per his income tax slab.

Winnings from such game shows and lotteries come under "Income from Other Sources" in your tax returns. While you have to let go 31.2% of your earnings in case the wins are more than Rs 10,000, the income received after TDS is not taxed again.

The Finance Act, 2023, created a completely separate regime for online games, and it behaves very differently from the lottery rules above. Two sections drive it: Section 194 (previously 115BBJ), which taxes net winnings at a flat 30%, and Section 393 (previously 194BA), which governs the TDS.

The big shift is that TDS is charged on net winnings, not on each prize. Net winnings are worked out as the total amount withdrawn plus the closing balance, minus your opening balance and total deposits during the year.

The platform deducts TDS at 30% on positive net winnings at the time of each withdrawal and again on any balance left in your account at the end of the financial year. There is no ₹10,000 cushion: if your net winnings are positive, TDS applies.

A simple illustration: you deposit ₹10,000, play, and withdraw ₹15,000. Your net winnings are ₹5,000, so TDS at 30% is ₹1,500, deducted before the money reaches your bank. Bonuses, referral credits and other incentives given by the platform are treated as taxable deposits and folded into this net-winnings calculation.

Also Read: Section 194A of Income Tax Act: TDS on Interest

Not every prize is cash. When you win a car, gold, a flat or a foreign holiday, tax is charged on the fair market value of the prize, and there is no cash to deduct it from, so the rules put the onus on the organiser to collect the tax first.

For gifts received in-kind, such as a car or a flat, a TDS of 31.2% will have to be paid by the receiver before taking possession of such a gift. For instance, if you won a car worth Rs 5,00,000 in a lucky draw, you would have to pay a TDS of 31.2% on the car, which is 1,56,000. In some cases, the company distributing such a gift may choose to absorb the TDS liability.

If you win a car valued at Rs 10 lakhs, then you must pay 31.2% of that amount, or Rs 3,12,000 in this situation. You must pay this amount out of your own pocket.

The same "pay before you receive" principle applies to prizes in kind won on online games: under Section 393 (previously 194BA), if the winnings are wholly in kind or the cash part is too small to cover the tax, the payer must ensure the tax has been paid before releasing the prize.

People often lump crypto gains together with lottery winnings because both are taxed at 30%, but they sit under different sections and behave differently. Income from the transfer of a virtual digital asset (crypto, NFTs) is taxed at a flat 30% under Section 194 (previously 115BBH), with only the cost of acquisition allowed and no set-off of losses against any other income.

TDS on VDA transfers is just 1% under Section 393 (previously 194S), a tracking mechanism rather than the final tax, compared with the 30% upfront bite on lottery winnings. Neither crypto gains nor lottery winnings allow expenses, exemptions or rebate, and a loss in one bucket cannot be used to cut taxes in the other.

The tax on winnings is a flat 30% with no slab benefit; the usual logic of "my income is low, so I'll get the TDS back" simply does not apply.

For FY 2025-26, the Section 156 (previously 87A) rebate lets a resident individual under the new regime pay zero tax on total income up to ₹12,00,000, with a maximum rebate of ₹60,000. But that rebate and the basic exemption limit expressly do not apply to income taxed at special rates, which includes lottery, game show and online gaming winnings. So even if your only income for the year is a ₹50,000 prize, the 30% tax on it stands, and the TDS is effectively non-refundable.

Practically, you still file a return: report the gross winnings under Income from Other Sources (usually in ITR-2), reconcile the TDS shown in your Form 168 (previously 26AS) and AIS, and claim credit for it. A refund only arises where excess TDS was deducted relative to the actual tax on that income, not simply because your total income is modest. If you also have other income on which too much TDS was withheld, that portion can still be refunded in the normal way, usually within a few weeks of processing.

A common myth is that you can dodge the tax by "gifting" the prize to a family member. You cannot. The tax liability arises the moment you win, not when you spend or transfer the money, so passing the prize on afterwards does nothing to erase your 30% liability.

Worse, it can create a second tax event: a gift of more than ₹50,000 received from a non-relative is itself taxable in the recipient's hands as income from other sources, and income-clubbing rules can pull the income right back to you if you gift to a spouse or minor child. In short, there is no legal workaround; the flat tax on the winnings is unavoidable.

Two quick clarifications that often trip people up.

• Section 194 BB deals only with earnings from horse races, whereas Section 194 B covers winnings from crossword puzzles, lotteries, and card games, to name a few. On prizes beyond Rs 10,000, a flat 30% TDS plus surcharges have been levied since 2020.
• In case an agent receives prize money from unsold tickets or unclaimed prizes, then it is considered his/her business income. Therefore, it is ineligible for a Section 194 B deduction. The tax code's Section 194 G, not Section 194 B, will be used to levy tax on lottery agents.

However, in the Income Tax Act of 2025, both the sections have been merged and a common Section 393.

Also Read: TDS on Lottery Winnings and How to Avoid Penalties

One update worth knowing: the Income Tax Act, 2025, replaces the six-decade-old Income Tax Act, 1961, from 1 April 2026.

• It renumbers almost every section and folds the scattered TDS provisions into a single consolidated section, but it does not change the tax policy on winnings;
• The rates, thresholds and treatment described above continue unchanged.
• Crucially, your return for FY 2025-26 is still governed by the 1961 Act, so you keep using the familiar numbers (Section 194B, Section 115BBJ, Section 194BA) for this year.
• The new numbering only starts to matter from the 2026-27 tax year.

The rules for FY 2025-26 have not softened: winnings are taxed at a flat 30%, the tax is collected before you ever see the money, and none of the usual deductions, exemptions or rebates applies. Know which section governs your win, report the full amount honestly, and reconcile the TDS in your Form 168 (previously 26AS) to avoid a mismatch notice. On a large or in-kind prize, a quick word with a tax professional is far cheaper than a scrutiny notice.

Also Read: Section 194G: TDS on Lottery Ticket Commission