The Finance Bill 2025 intends to amend section 194BB of the Income Tax Act 1961. Accordingly, a single transaction exceeding ₹10,000 will be the threshold for applicability of TDS. At present, the aggregate amounts exceeding ₹10,000 during the financial year are taken as the threshold. In other words, It is proposed to remove the condition of threshold applying on the aggregate of amounts exceeding ₹10,000 and to now instead, apply in respect of a single transaction. This amendment will take effect from the 1st day of April 2025,” the explanatory memorandum said.
Appreciating the move, R.Raghuram Reddy, MP from Kamam Telegana and Steward of Hyderabad Race Club said: “Finance Minister you have helped the dying Industry to survive,” he said.
Amit Maheshwari, Tax Partner with AKM Global change in the mechanism will leave the small winnings out of TDS ambit. This measure is more targeted towards ease of compliance for lottery and similar businesses and will considerably reduce administrative burden for them,” he said.
Sonu Iyer, Partner with EY India said that the rationalization of TDS provisions on winnings from lottery and horse racing marks a shift towards transaction-based taxation, ensuring immediate tax compliance. Under the new rule, a flat 30 per cent TDS will be applied to a single transaction exceeding ₹10,000, replacing the earlier provision that considered the aggregate winnings over a financial year.
“This change could impact frequent participants, as tax deduction will now occur at the point of each significant win rather than being assessed cumulatively. While the overall taxation remains unchanged, the revised approach simplifies administration but may also lead to higher upfront tax deductions for individuals with multiple smaller winnings,” she said.
