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The 2-Minute Summary
Horse racing is one of India’s few legally permitted forms of betting. Winnings from licensed race courses are taxable, and TDS is deducted by the bookmaker or licence holder before paying out any winnings above Rs. 10,000 from a single race or event. Like lottery winnings, the Rs. 10,000 threshold applies per single transaction. There is no annual aggregation.
Example: Ashok places a bet and wins Rs. 30,000 on a single race at a licensed racecourse in Bangalore. The bookmaker deducts TDS at rates in force on Rs. 30,000 before paying Ashok. If Ashok had won only Rs. 9,000, no TDS would apply.
Under Income Tax Act 1961: Section 194BB of the Income Tax Act 1961. Now Section 393(3) Sl. No. 3 under the 2025 Act. Rate and threshold unchanged.
At a Glance
| Item | Details |
| New Act Reference | Section 393(3), Sl. No. 3 of Income Tax Act 2025 |
| Old Act Reference | Section 194BB of Income Tax Act 1961 |
| Who Deducts | Bookmaker or any person holding a government licence for horse racing or wagering |
| TDS Rate | 30% |
| Threshold | Rs. 10,000 per single transaction |
| When to Deduct | At time of payment of winnings |
| Form for TDS Certificate | Form 16A |
Who Deducts TDS on Horse Race Winnings
The deduction is specifically placed on the bookmaker or the person to whom a licence has been granted by the Government under any law in force for horse racing in any race course, or for arranging wagering or betting in any race course. This means only licensed entities operating legally at race courses are covered. Unofficial or unlicensed betting operators are outside this provision, though the winnings would still be taxable in the recipient’s hands.
Threshold: Per Transaction
The Rs. 10,000 threshold is per single transaction, not an annual aggregate. Each race payout is assessed independently. Multiple smaller wins below Rs. 10,000 each are not aggregated for TDS purposes. However, all winnings from horse races, regardless of whether TDS was deducted, must be declared in the ITR under Income from Other Sources and taxed at the flat rate of 30%.
Practical Compliance Checklist
- If you win at a licensed racecourse: TDS will be deducted if your winnings from a single event exceed Rs. 10,000. Collect Form 16A from the race club or bookmaker.
- When filing your ITR: Declare all horse race winnings, including those below the Rs. 10,000 TDS threshold, under Income from Other Sources. All horse race winnings are taxable at 30% flat regardless of TDS.
- If TDS was deducted: Claim it as credit in your ITR. Any shortfall between 30% tax and TDS already deducted must be paid as self-assessment tax.
Horse race winnings are taxed at the same flat rate as lottery winnings: 30% with no deductions. The licensed race clubs and bookmakers act as withholding agents, ensuring at least some of the tax is collected before the winnings change hands.
