Tax on KBC Winning Amount

KBC or Kaun Banega Crorepati is one of the most famous reality gaming TV shows on Indian television. Several meritorious and talented individuals try to get selected for this show in order to win the jackpot prize. It really feels delightful to see people crack all the questions and take home an enormous amount of money. However, there is a catch. 

Have you ever thought about how much tax applies on KBC prize money?

Let's discuss this topic in detail. 

How much Tax is Levied on KBC Winning Amount?

As per section 115BB of the Income Tax Act, earning in cash or kind from lotteries, Card games, Gambling, and batting, including winning from online or TV show quiz games like KBC, Dus Ka Dum, etc., are taxable under the head of “Income From Other Source”, and tax at the specified rate of 30%, including cess 4% and surcharge shall be applied accordingly.

Additionally, the winning amount paid to the winner after deducting TDS (Tax Deducted At Source) under Section 194B of the Income Tax Act, if the winning amount exceeds the threshold limit of Rs. 10,000, then TDS shall be deducted at the rate of 30%+ applicable surcharge is levied.

The authorities or the person distributing the prize money are responsible for deducting TDS before handing over the reward. In case the prize is in kind and not cash, the person or authority distributing the prize should make sure that the winner has paid the applicable tax.

Tax Implications on the Winnings in Cash:

Section 115BB of the Income-tax Act deals with the winnings through lottery, betting, gaming, crossword puzzle, card games or other games of any nature and the TDS on these winnings is to be deducted under Section 194B of the IT Act. According to this section, the payer of any such winnings of more than Rs 10,000/- shall deduct income-tax at 30%. Actually, if the levy of 3% less on the income-tax amount is taken into account, the effective tax rate would be 30.9%. 

Another significant point that must be said here is even in a situation where one of the participants does not have any source of income whatsoever and his winning amount from a game show or lottery is just Rs 1, 00,000/- then still tax of Rs 30,900/- will be charged on the same because no basic exemption or any allowance or deduction is entitled to set-off against such winnings.

Tax Implications on the Winnings in Kind:

Where winnings are entirely in kind, or in part cash and in part in kind, and cash is inadequate to cover the amount of the liability for TDS, the payee shall, prior to making payment of the winnings, be required to ensure that tax has been paid on winnings. So don't be surprised if you have won a car as the prize for a game or scheme and are asked by the organizer to pay 30% of the value of the car towards TDS.

Any and all taxes and/or levies which are payable on the prize money won by the Participant(s), as per Indian laws shall be paid by the Participant(s) in respect of the prize. Prize money will be paid to the Winner(s) after deduction of all applicable taxes and levies and upon submission of relevant documents as indicated by the Company and will be made within the time frame set by the Company.

Tax Implication On KBC Winnings

Important Points to Remember Regarding Section 194B

Here are some important pointers you must remember concerning Section 194B. This is applicable for prize earnings from all types of reality TV shows, lotteries, etc.: 

• In case you receive the prize money in instalments, TDS is applicable at a proportionate rate each time you receive payment. 
• For lotteries, if the agent has a ticket with an unclaimed prize or if the winning amount is on an unsold ticket, it becomes a part of his/her business income. Thus, in this regard, there is no applicable TDS. 
• If the prize is only in kind (holiday package, car, etc.), the winner has to pay the TDS before he/she can receive it. The applicable tax rate will be 30% + applicable surcharge of the item’s market value.  
• In case you receive a prize which is both in cash and kind, TDS is applicable on the joint value of both. However, it will be deducted only from the cash portion.
• Moreover, if the cash portion is not enough or the prize is only in kind, then the individual distributing these prizes needs to ensure that all taxes are paid before handing them over to the winner.  
• In case a certain portion of the prize winnings will go to the government or the lottery agency, that part will not be applicable for TDS. 
• As per Section 194G, payment of commissions to lottery agents is liable for TDS. 

Final Word

Now that you know KBC tax on winning amount 2023, you have a decent idea of how much you may receive upon winning a cash prize. Furthermore, please take note that in case you are a non-resident, the applicable TDS will be 30% + 4% additional cess.