I collected on a horse race and the club deducted tax. Who is obliged to deduct under s.194BB, and what is the threshold now?
Section 194BB puts the duty on a defined class of payer only: a bookmaker, or a person to whom a licence has been granted by the Government under any law for the time being in force for horse racing in any race course or for arranging for wagering or betting in any race course. Such a person paying any income by way of winnings from any horse race must deduct at the rates in force where the amount, in respect of a single transaction, exceeds ten thousand rupees — that per-transaction wording having replaced 'or aggregate of amounts', and the words 'during the financial year' having been omitted, by Act No. 7 of 2025 with effect from 1 April 2025.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2025-04-01, reported as Section 194BB of the Income-tax Act, 1961, as amended up to 2026. It bears on section 194BB, section 194B, section 115BB, section 74A of the Income Tax Act 1961, in TDS Defaults and How Tax Law Is Read matters.
The identity of the deductor is the whole point of this section and it is where the arguments are. Unlike s.194B, which fastens on 'the person responsible for paying' at large, s.194BB names two categories — a bookmaker, and a Government licensee for horse racing or for arranging wagering or betting in a race course. A payer who fits neither has no duty under this section, however plainly the receipt is winnings from a horse race in the payee's hands. The threshold moved on exactly the same day and by exactly the same Act as the s.194B threshold, and in exactly the same words, so a deductor who has updated one and not the other is running two inconsistent systems. Note also what the section does not do: it fixes no rate of its own, saying only 'at the rates in force', and it contains no in-kind proviso of the kind s.194B carries — so the machinery for a non-cash winning on a horse race is not supplied by this section.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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The section reads: any person, being a bookmaker or a person to whom a licence has been granted by the Government under any law for the time being in force for horse racing in any race course or for arranging for wagering or betting in any race course, who is responsible for paying to any person any income by way of winnings from any horse race, being the amount in respect of a single transaction exceeding ten thousand rupees, shall, at the time of payment thereof, deduct income-tax thereon at the rates in force. The section's footnotes record that 'in respect of a single transaction' was substituted for 'or aggregate of amounts' by Act No. 7 of 2025 with effect from 1 April 2025, and that the words 'during the financial year' were omitted by the same Act from the same date. The section carries no proviso and no Explanation.
As the section stands from 1 April 2025: the duty falls only on a bookmaker or a Government licensee of the described kind; the trigger is a single transaction exceeding ten thousand rupees; deduction is at the time of payment at the rates in force; and there is no in-kind mechanism and no rate stated in the section itself. Immediately before 1 April 2025 the trigger was the amount or aggregate of amounts exceeding ten thousand rupees during the financial year.
Not applicable — this is a statement of the statutory text, with the amendment history taken from the footnote apparatus carried on the section. No judicial reasoning is involved.
194BB. Any person, being a bookmaker or a person to whom a licence has been granted by the Government under any law for the time being in force for horse racing in any race course or for arranging for wagering or betting in any race course, who is responsible for paying to any person any income by way of winnings from any horse race, being the amount in respect of a single transaction exceeding ten thousand rupees, shall, at the time of payment thereof, deduct income-tax thereon at the rates in force.
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Handle my notice → Ask a CA on WhatsAppSection 194BB puts the duty on a defined class of payer only: a bookmaker, or a person to whom a licence has been granted by the Government under any law for the time being in force for horse racing in any race course or for arranging for wagering or betting in any race course. Such a person paying any income by way of winnings from any horse race must deduct at the rates in force where the amount, in respect of a single transaction, exceeds ten thousand rupees — that per-transaction wording having replaced 'or aggregate of amounts', and the words 'during the financial year' having been omitted, by Act No. 7 of 2025 with effect from 1 April 2025. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 194BB, section 194B, section 115BB, section 74A of the Income Tax Act 1961. It is reported as Section 194BB of the Income-tax Act, 1961, as amended up to 2026. The identity of the deductor is the whole point of this section and it is where the arguments are. Unlike s.194B, which fastens on 'the person responsible for paying' at large, s.194BB names two categories — a bookmaker, and a Government licensee for horse racing or for arranging wagering or betting in a race course. A payer who fits neither has no duty under this section, however plainly the receipt is winnings from a horse race in the payee's hands. The threshold moved on exactly the same day and by exactly the same Act as the s.194B threshold, and in exactly the same words, so a deductor who has updated one and not the other is running two inconsistent systems. Note also what the section does not do: it fixes no rate of its own, saying only 'at the rates in force', and it contains no in-kind proviso of the kind s.194B carries — so the machinery for a non-cash winning on a horse race is not supplied by this section. If it applies to you, the first step is this: Ask first whether the payer is within the defined class — a bookmaker, or a Government licensee for horse racing or for arranging wagering or betting in a race course. If not, s.194BB imposes no duty.
The section reads: any person, being a bookmaker or a person to whom a licence has been granted by the Government under any law for the time being in force for horse racing in any race course or for arranging for wagering or betting in any race course, who is responsible for paying to any person any income by way of winnings from any horse race, being the amount in respect of a single transaction exceeding ten thousand rupees, shall, at the time of payment thereof, deduct income-tax thereon at the rates in force. The section's footnotes record that 'in respect of a single transaction' was substituted for 'or aggregate of amounts' by Act No. 7 of 2025 with effect from 1 April 2025, and that the words 'during the financial year' were omitted by the same Act from the same date. The section carries no proviso and no Explanation. The matter was decided on 2025-04-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. As the section stands from 1 April 2025: the duty falls only on a bookmaker or a Government licensee of the described kind; the trigger is a single transaction exceeding ten thousand rupees; deduction is at the time of payment at the rates in force; and there is no in-kind mechanism and no rate stated in the section itself. Immediately before 1 April 2025 the trigger was the amount or aggregate of amounts exceeding ten thousand rupees during the financial year.
Not applicable — this is a statement of the statutory text, with the amendment history taken from the footnote apparatus carried on the section. No judicial reasoning is involved. In the words reproduced by the source cited on this page: "194BB. Any person, being a bookmaker or a person to whom a licence has been granted by the Government under any law for the time being in force for horse racing in any race course or for arranging for wagering or betting in any race course, who is responsible for paying to any person any income by way of winnings from any horse race, being the amount in respect of a single transaction exceeding ten thousand rupees, shall, at the time of payment thereof, deduct income-tax thereon at the rates in force."
It was decided by the CBDT Circulars & Instructions on 2025-04-01 and is reported as Section 194BB of the Income-tax Act, 1961, as amended up to 2026. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 194BB, section 194B, section 115BB, section 74A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. As the section stands from 1 April 2025: the duty falls only on a bookmaker or a Government licensee of the described kind; the trigger is a single transaction exceeding ten thousand rupees; deduction is at the time of payment at the rates in force; and there is no in-kind mechanism and no rate stated in the section itself. Immediately before 1 April 2025 the trigger was the amount or aggregate of amounts exceeding ten thousand rupees during the financial year. It arises in TDS Defaults and How Tax Law Is Read matters, on section 194BB, section 194B, section 115BB, section 74A of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. For a payment on or after 1 April 2025, test each transaction separately against ten thousand rupees; before that date the test was the amount or aggregate of amounts during the financial year. Take the rate from the Finance Act rate schedule, not from the section, which says only 'at the rates in force'. Keep s.194BB and s.194B apart in your TDS return and in your Form 26AS reconciliation: they carry different deductor classes and different section codes even though the threshold and its 2025 amendment are identical. For the winner's own liability, go to s.115BB, whose heading covers races including horse races but excludes income from the activity of owning and maintaining race horses — a carve-out that matters to an owner and not to a punter.
Still good law. The section as stated is current, and the threshold history can now be dated. An earlier text of s.194BB carries the footnotes for the earlier amendments that the current one does not print, attributing the successive changes to the Finance Act 1986 with effect from 1 June 1986, the Finance (No. 2) Act 1991 with effect from 1 October 1991, the Finance Act 2010 with effect from 1 July 2010, the Finance Act 2016 with effect from 1 June 2016 - which is the step to ten thousand rupees that was previously attributed to nothing - and the Finance Act 2023 with effect from 1 April 2023, which produced the 'amount or aggregate of amounts exceeding ten thousand rupees during the financial year' formula. The section's operative words - the bookmaker-and-licensee deductor class, 'winnings from any horse race', and deduction at the time of payment at the rates in force - are corroborated word for word on two earlier texts. The 1 April 2025 change to the current per-single-transaction form is attested by s.194BB's own footnotes and needs no inference from other sections: the section carries 'Sub. for "or aggregate of amounts" by Act No. 7 of 2025, w.e.f. 1-4-2025' and 'Words "during the financial year" omtt. by Act No. 7 of 2025, w.e.f. 1-4-2025'. No Finance Act text has been read. A reader relying on the threshold for a specific year should still check the section as it stood for that year. The section belongs to the Income-tax Act 1961, replaced by the Income-tax Act 2025 with effect from 1 April 2026. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The current text is headed '194BB - Winnings from horse race' in the Income-tax Act, 1961, and carries two footnotes: 'Sub. for "or aggregate of amounts" by Act No. 7 of 2025, w.e.f. 1-4-2025.' and 'Words "during the financial year" omtt. by Act No. 7 of 2025, w.e.f. 1-4-2025.' Two earlier texts corroborate the section's operative words and date part of its threshold history. One, under the same heading, prints the identical deductor-class wording with a two thousand five hundred rupee threshold and the footnotes 'Inserted by the Finance Act, 1978, w.e.f. 1-4-1978' and 'Substituted for "five thousand rupees" by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. Earlier italicised words were substituted by the Finance Act, 1986, w.e.f. 1-6-1986.' The other prints five thousand rupees with the footnote 'Substituted for "two thousand five hundred rupees" by the Finance Act, 2010, w.e.f. 1-7-2010. Earlier the quoted words were amended by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991 and Finance Act, 1986, w.e.f. 1-6-1986.' So the ladder is: five thousand rupees reduced to two thousand five hundred by the Finance (No. 2) Act, 1991 with effect from 1 October 1991; restored to five thousand by the Finance Act, 2010 with effect from 1 July 2010; and ten thousand thereafter. WHAT REMAINS UNSOURCED: no text read carries a footnote dating the move from five thousand to ten thousand rupees, and the current per-single-transaction wording rests on the current text alone. 'decided_on' carries a commencement date and not a decision date: 1 April 2025, the date the two footnotes give for the move to a per-single-transaction threshold. The only independent support for the 2025 amendment is that the parallel change to s.194B is recorded in the same words and attributed to the same Act No. 7 of 2025 with effect from the same date, and that the same Act is credited with the 1 April 2025 threshold changes to s.194LA and s.194G. On s.115BB, referred to in the guidance above: its current text has NOT been read, and no rate under it is stated here. One point of structure that the section leaves to be filled in elsewhere. It fixes no rate of its own, saying only 'at the rates in force', and it contains no in-kind proviso of the kind s.194B carries. So the rate must be taken from the Finance Act rate schedule for the year, and the machinery for a non-cash winning on a horse race is simply not supplied by this section. Neither gap is an oversight in this entry; both are gaps in the section. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
As the section stands from 1 April 2025: the duty falls only on a bookmaker or a Government licensee of the described kind; the trigger is a single transaction exceeding ten thousand rupees; deduction is at the time of payment at the rates in force; and there is no in-kind mechanism and no rate stated in the section itself. Immediately before 1 April 2025 the trigger was the amount or aggregate of amounts exceeding ten thousand rupees during the financial year.
TaxSphere, “Statutory position — s.194BB: winnings from a horse race, and who the deductor is”, https://taxnotice.vittsphere.com/caselaw/case/statutory-position-194bb-winnings-from-horse-race-bookmaker-and-licensee-deduction/ (validity last checked 2026-09-16)
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