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 194B of the Income Tax Act, any type of earning 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 levied. 

The authorities or the person distributing the prize money is 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 applicable tax has been paid by the winner. 

Your eligible income tax bracket does not count in this regard. Moreover, for these types of income, the standard deduction is not applicable. Also, you cannot avail of any tax deductions under Section 80C or 80D. 

Tax Implication On KBC Winnings

The winnings from such game shows will be taxed under the head “Income From Other Sources” at a flat rate of 30%. It is important to note that even if the taxpayer has no other source of income or his total income is below the basic exemption limit, the taxpayer will still have to pay tax on the winnings and any exemption will not be allowed.  

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.