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In India, lottery winnings are subject to tax under the Income Tax Act, 1961. According to current regulations, any income from lottery winnings is considered as income from other sources and is taxable at a flat rate of 30% under Section 115BB. This tax is applicable regardless of the amount won, and it is deducted at source （TDS） by the lottery operator or payer when the prize money is distributed. Additionally, no basic exemption limit applies to lottery winnings, meaning even small amounts are taxed. It is important for winners to declare this income in their tax returns to avoid penalties. For example, if you win Rs. 10,000 in a local lottery, the tax deducted would be Rs. 3,000, leaving you with Rs. 7,000. Always consult a tax advisor for accurate guidance based on your specific situation. |
