Return Filing For Chess Tournaments Winners – What’s the Case?

Any player or winner of a game, be it chess or gambling, will have to pay tax on the prize money under the head ‘Income from other Sources.’ The earnings that come within this category are:

  • Lottery
  • Crossword Puzzle
  • Gambling or betting
  • Races including Horse races
  • Game Show or any entertainment program on television or electronic mode

The tax applied is 30% at a flat rate, and with the addition of cess, it comes to 31.2%. If the prize money exceeds Rs. 10,000/- then a 10% TDS is also deducted. In some instances, the prize money is not taxable due to exemptions set by the law. In such cases, the 10% tax is still deducted at source if the amount is more than ten thousand. The only exception is winning from horse races where TDS is cut when the money is more than Rs. 5000.

Moreover, no deduction or expenditure is allowed under section 80C or 80D from prize money. The full amount is taxed at a flat rate of 30% plus cess. For instance, the prize money won is Rs 2 lakhs, then tax of 31.2% will be applied on the whole two lakhs.

6 Replies to “Return Filing For Chess Tournaments Winners – What’s the Case?”

  1. At Vakilsearch, we understand that navigating the turbulent shores of tax filing can be hard. Comprehending which prize money is taxable and which not can turn even the brightest minds around. We help you ease the process by aiding you in professional tax registration and tax return filing. With a simple online form, you can start the procedure from the comfort of your home or office.
    We will collect the necessary data, prepare your filing accurately and quickly, and then submit it for you. Swing by our site or better yet, give us a call if you have any questions regarding money won during a tournament.

    1. Hello VakilSearch, Thank you for the informative comment. Professional tax registration and tax return filing can be a difficult task for anyone. I checked out your website just now and was very much impressed with the services you offer. You make the whole process sound so easy! That is something great, indeed.

  2. The article talks about certain prizes being exempt from taxation. The CBDT passed a law that states that all prize won, in cash or kind, from games like Olympic Games, CommonWealth Games and Asian Games is exempt. The only condition is that the winner has to be a medal holder!

  3. A great article and it reminded me of Mr. Abhinav Bindra, who is the sole gold medal winner in the Olympics from India. Because he won the prize in 2008, before the exemption laws were placed, his money and medal were taxable. For every winner after the year 2014, the award was not taxed!

  4. I just won a massive jackpot on an online lottery game which made me stumble upon this article and VakilSearch. If someone is in the same dilemma as I was, I highly recommend VakilSearch. They sorted out my income tax return filing in a jiffy!

  5. Thank you for the very informative article and all the commentators. I was surprised to know that prize money from games, lottery and shows are also taxable. I’d like to add that when a medal, car or similar prize is given, then the tax is calculated on its market value.

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