In India, while there is no specific federal tax on lottery winnings under the central government\“s direct tax laws, lottery prizes are subject to taxation under the Income Tax Act, 1961. According to Section 194B of the Act, any winnings from lotteries, crossword puzzles, card games, or other similar activities are considered income from other sources and are taxable at a flat rate of 30% plus applicable surcharge and cess. This tax is deducted at source （TDS） by the lottery operator or the entity distributing the prize if the winnings exceed ₹10,000 in a financial year.
Additionally, state governments in India also impose their own taxes on lottery tickets and winnings, as lotteries are regulated under the Lotteries （Regulation） Act, 1998. For example, states like Kerala, Maharashtra, and Punjab have their own lottery schemes and tax structures. It is important for winners to declare such income in their annual tax returns and pay any additional tax if their total income falls into a higher tax bracket. Proper documentation and consultation with a tax advisor are recommended to ensure compliance with Indian tax laws. |
