In India, lottery winnings are subject to specific tax regulations that winners must understand. According to Indian tax laws, any income from lottery winnings is considered as \“income from other sources\“ and is taxable under the Income Tax Act, 1961.
The tax rate for lottery winnings in India is 30% plus applicable cess and surcharge. This means if you win a lottery prize, 30% of the winnings will be deducted as Tax Deducted at Source （TDS） before you receive the amount. Additionally, a health and education cess of 4% is applied on the tax amount, making the effective tax rate approximately 31.2%.
For example, if you win ₹10,00,000 in a lottery, the TDS deducted would be ₹3,00,000 （30% of ₹10,00,000）, plus cess of ₹12,000 （4% of ₹3,00,000）, resulting in a net payment of approximately ₹6,88,000 to the winner.
It\“s important to note that lottery winnings are taxed regardless of the amount, and winners must declare this income in their annual tax returns. The tax deduction is typically handled by the lottery operator or the entity distributing the prize money. |
