In India, lottery winnings are subject to income tax under the Income Tax Act, 1961. According to Section 194B, a 30% tax deduction at source （TDS） is applied to lottery winnings if the amount exceeds Rs. 10,000 in a financial year. This tax is deducted by the payer before distributing the prize money to the winner.
Additionally, lottery winnings are considered as income from other sources and must be reported in the individual\“s income tax return. The total taxable income, including lottery winnings, is taxed at slab rates applicable to the individual. For example, if a person wins a lottery of Rs. 1,00,000, the TDS of 30% （Rs. 30,000） is deducted, and the net amount received is Rs. 70,000. However, the winner may need to pay additional tax if their total income falls into a higher tax bracket.
It is important for winners to keep proper documentation and consult a tax advisor to ensure compliance with Indian tax laws. Failure to report such income can lead to penalties and legal issues. |
