In India, lottery winnings are considered as income from other sources and are subject to income tax under the Income Tax Act, 1961. The tax treatment depends on whether the lottery is organized by the government or by private entities.
For lottery winnings from government-run lotteries, a Tax Deducted at Source （TDS） of 30% is applicable if the prize amount exceeds Rs. 10,000. This tax is deducted at the time of payment itself.
For private lottery winnings, the entire amount is taxable as per the individual\“s income tax slab rates. Additionally, a TDS of 30% is deducted if the prize money exceeds Rs. 10,000.
It is important to note that lottery winnings are also subject to cess and surcharge as applicable. Winners must declare these winnings in their income tax returns under the head \“Income from Other Sources\“.
Many states in India also levy their own lottery taxes. For example, states like Kerala, Punjab, and West Bengal have specific lottery taxation rules that winners need to comply with. |
