In India, lottery winnings are subject to taxation under the Income Tax Act, 1961. The tax treatment depends on whether the lottery is considered a game of chance or skill, but most lottery winnings fall under the category of \“income from other sources\“.
According to current tax regulations, any lottery winnings exceeding Rs. 10,000 are subject to Tax Deducted at Source （TDS） at the rate of 30% under Section 194B of the Income Tax Act. This means that if you win more than Rs. 10,000 in a lottery, the organizer must deduct 30% tax before paying you the prize money.
Additionally, lottery winnings are also subject to surcharge and cess, which can increase the effective tax rate to approximately 31.2%. It\“s important to note that this tax is deducted at source, and winners must still report the winnings in their income tax returns for the relevant financial year.
Many states in India also have their own lottery regulations and may impose additional taxes or fees. For example, states like Kerala, Maharashtra, and Punjab have specific rules governing lottery operations and taxation within their jurisdictions. |
