Income Tax

TDS on Winnings from Horse Races: Section 194BB Explained

TDS on Horse Race Winnings: Section 194BB Explained

CA Nikhil Gupta·June 2026·5 min readOther Income

Reviewed by CA Nikhil Gupta · Last reviewed 17 June 2026

Horse racing is one of the few forms of betting that's fully legal in India - and the tax department has a dedicated section just for it. If you've won money at the races, here's exactly how much the bookmaker withholds and how to report the rest.

What Is Section 194BB?

Section 194BB requires any person responsible for paying winnings from horse races (typically a racecourse, bookmaker, or totalizator) to deduct TDS if the amount of winnings to a single person exceeds ₹10,000 in a single payment/race.

Winning Amount	TDS Applicability	Rate
Up to ₹10,000	No TDS	Nil
Above ₹10,000	TDS on the entire amount	30% (plus applicable cess)

Taxation Under Section 115BB

Like lottery and game show winnings, income from horse race winnings is taxed under Section 115BB at a flat rate of 30% (plus 4% health and education cess, giving an effective rate of approximately 31.2%), regardless of the recipient's total income or applicable slab.

Same restrictions as lottery winnings apply: no deductions for expenses (e.g., money spent on losing bets cannot be set off against winnings from a winning bet), no Chapter VI-A deductions (80C, 80D etc.) can reduce this income, no benefit of the basic exemption limit, and no loss set-off from other heads of income against horse race winnings.

Can Losses on Other Races Be Set Off Against Winnings?

No. Each race/bet is treated independently for tax purposes. If you lose ₹50,000 across several races but win ₹15,000 on one race, you cannot net these off - the full ₹15,000 winning is taxable at 30% (with TDS deducted on it since it exceeds ₹10,000), and the ₹50,000 in losses provides no tax benefit whatsoever, as losses from owning and maintaining race horses are governed by separate (and limited) rules under Section 74A, applicable mainly to those in the business of horse racing/owning race horses - not casual bettors.

Reporting in Your ITR

Horse race winnings must be reported under "Income from Other Sources" in Schedule OS, under the category for income taxable at special rates under Section 115BB. The TDS deducted under Section 194BB will appear in your Form 26AS/AIS and can be claimed as a tax credit - since the TDS rate (30%) matches the tax rate, there is usually no additional tax payable on this specific income, but it must still be reported.

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Have other 'special rate' income to report?See how lottery, game show, and other windfall income is taxed.

Read Lottery Tax Guide

2026 current-law quick reference

Finin2min answer: For FY 2025–26, horse-race winnings are subject to legacy section 194BB withholding at 30% when the statutory per-transaction threshold is crossed; from 1 April 2026 use the corresponding section-393/current-rule entry.

2026 law transition: FY 2025–26 / AY 2026–27 remains under the Income-tax Act, 1961. Income of the tax year beginning 1 April 2026 is governed by the Income-tax Act, 2025 and the Income-tax Rules, 2026. Use the Department’s official comparison/transition tools before carrying an old section or form number into a post-1-April-2026 transaction.

What changes the answer?

What to check	What to do	Common mistake to avoid
Core classification	For FY 2025–26, horse-race winnings are subject to legacy section 194BB withholding at 30% when the statutory per-transaction threshold is crossed; from 1 April 2026 use the corresponding section-393/current-rule entry.	Do not decide from the label used on an invoice, agreement or bank narration alone.
Edge case	The threshold is not a tax-free deduction from winnings; it determines withholding obligation.	Recompute when the fact pattern crosses this boundary.
Evidence	Reconcile the documents below to the tax/regulatory return before filing.	A correct legal rule with an unreconciled evidence trail can still fail in assessment or audit.
Effective date	Apply the law/form/rate for the actual transaction, tax year or proceeding date.	Do not mix FY 2025–26/AY 2026–27 legacy references with post-1-April-2026 forms.

Worked practical example

A bettor wins ₹25,000 in one qualifying payment. Test the withholding rule on that payment, then report the gross taxable winnings in the return.

Evidence checklist

payout statement
TDS certificate
betting/identity record
AIS/26AS
return income schedule

Primary-source checks: Income Tax Department — TDS rates/guidance · Income-tax Act 2025 transition/forms

How to use this: This current-law summary reflects the latest position. Where it conflicts with an older rate, threshold, form or section reference elsewhere on the page, rely on the current, dated primary source above.

Frequently Asked Questions

If I win Rs 8,000 on a horse race, is it tax-free? ▼

No. While TDS under Section 194BB applies only above Rs 10,000, the winning itself is still taxable at the flat 30% rate under Section 115BB and must be reported in your ITR under Income from Other Sources, even if no TDS was deducted.

Can I set off my losses from other horse races against my winnings for tax purposes? ▼

No. Income from horse race winnings taxed under Section 115BB does not allow set-off of losses from other races or bets. Each winning amount is taxed on a gross basis at 30%, with no adjustment for amounts lost on other bets.

Is the tax treatment different for someone who owns and races horses professionally versus a casual bettor? ▼

Yes, to some extent. A casual bettor's winnings are taxed under Section 115BB as described. A person in the business of owning and maintaining race horses has business income/loss governed by separate provisions (including restrictions under Section 74A on set-off and carry-forward of losses from this specific activity), which is a more specialized scenario typically requiring professional tax advice.

Source and review trail

Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.

Primary category: Income Tax
Official starting point: www.incometax.gov.in

Page source links

The prior page did not embed a page-specific external source. The category authority above is the minimum verification starting point; a specific instrument should be added when available.

Primary sources & related provisions

Statutory provisions referenced in this guide:

Section 195 - Income-tax Act