In India, lottery winnings are subject to tax deductions under the Income Tax Act. The tax rate applicable on lottery winnings is 30% under Section 115BB of the Income Tax Act, 1961. This tax is deducted at source （TDS） by the lottery operator or the person making the payment.
Additionally, if the lottery winnings exceed Rs. 10,000 in a financial year, the deductor must deduct TDS at 30%. No basic exemption limit applies to lottery income, meaning even small winnings are taxable if they cross the threshold. The tax is calculated on the gross winnings without any deductions for expenses.
For example, if you win Rs. 50,000 in a lottery, the TDS deducted would be Rs. 15,000 （30% of Rs. 50,000）, and you would receive Rs. 35,000. It is important to note that this income must be reported in your income tax return under the head \“Income from Other Sources\“. Failure to do so may result in penalties.
In some states, local lottery products like Kerala Lottery, Nagaland Lottery, or Sikkim Lottery follow similar tax rules. Always check the specific terms and conditions of the lottery product you participate in to understand the exact tax implications. |
