662+ Lawyers are online 
Taxation Details for Online Competition
13-Nov-2025 (In Tax Law)
I wanted to start an Online skill based contest, It is a free to join contest, No entry fee charged for participation. Winners will be rewarded Cash / Physical gifts. I have some queries regarding this,
1. Is TDS applicable for Cash Prizes? If yes, is there any minimum threshold value?
2. Can i allow International users to join? What about be the TDS rules for them?
3. Is TDS applicable for Physical gifts like Headphones, Watches...etc. If yes, is there any minimum threshold value?
Regarding your contest (in India):
* Cash Prizes (TDS): Yes, TDS is applicable on winnings from skill-based contests. The rate is 30% (plus cess/surcharge, making it approx. 31.2%). The threshold for deduction is when winnings exceed ₹10,000 in a Financial Year (FY) under Section 194B, or on the net winnings from online gaming with potentially a lower/no threshold under Section 194BA (new rules). Consult a CA for the specific section applicable to your free-to-join skill contest.
* International Users: You can allow them. TDS rules for non-residents are complex (often Sec 194B or 194E applies), with a TDS rate of 30% or more, which may be adjusted by a relevant Double Taxation Avoidance Agreement (DTAA) if they provide the necessary documents. You must comply with FEMA/RBI regulations for foreign remittances.
* Physical Gifts (TDS): Yes, the fair market value of physical gifts (like headphones) is treated as 'winnings.' If the value exceeds ₹10,000 (under Sec 194B) or the net winnings value applies (under Sec 194BA), 30% TDS is deducted. You must ensure the winner pays the tax before the prize is released, or you pay it on their behalf.
Helpful?
Adv. S Dinesh Anand
Trichy | 5+ Answers
CONTACT NOW
Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at lawrato.com and has been responded by one of the Divorce Lawyers at lawrato.com to address the specific facts and details.
Connect with top Tax lawyers for your specific legal issue
No Comments! Be the first one to comment.
"lawrato.com has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."
