If you win a lottery or prize money in a competition, are you required to pay Income-tax on it?

 

​​Yes, such winnings are liable to flat rate of tax at 30% . In such a case the payer of prize money will generally deduct tax at source (i.e., TDS) from the winnings and will pay you only the balance amount.The basic exemption limit is not available in case of winnings from lottery i.e You are required to pay tax at the rate of 30% on total winnings.

Also No deduction u/s sec 80C or 80D or any other deduction/allowance is allowed from such income

It will be taxable under the Head – Income from other sources 

If the prizes are received in kind say a house,car or vacation etc , then prize distributor shall ensure before releasing the prize that tax has been duly paid. Tax is paid as per the market value of the prize given. The prize distributor can either recover from the winner or can himself bear the burden of tax.

 

Golden Rule – in case you won a lottery your mandatory profit sharing with government is 70 :30 , enjoy your 70%

 

Visit www.papertax.in and speak to your dedicated tax adviser for any further queries with regards to Income tax & G.S.T. matters, or download paper tax mobile application from Google play store to stay updated for any legal updates.

Was this post helpful?
Let us know if you liked the post. That’s the only way we can improve.
Yes1
No0
Powered by Helpful

Leave a Reply

Your email address will not be published. Required fields are marked *

Call Now Button