Taxation of Lottery Winnings in India
Recently I have started to take quite an interest in taxation in India and various form of taxes people of India have to pay. One such interesting aspect was taxation on Lottery Winnings and even though I knew that Lottery Winners have to pay a hefty tax I wanted to know exactly how much they pay. In my head, I had a rough estimate of 30% tax and that was the max I could think about but boy was I wrong.
After going through some articles related to taxes I found out that according to Income Tax Act Section 194B any lottery Winnings or any game winnings will be taxed at 30% provided the amount won is over 10000 INR. Now add another 37% Surcharge on the taxed amount and 4% CESS and now you have almost half your money gone just like that to Taxes.
The reason I thought about writing this post is that my Dad likes to buy lottery tickets sometimes and I feel like he doesn't know what the tax implications are if he wins any amount in lottery and the other reason is also that in India majority of the people don't know all the tax implications we have as all we know is to pay our income taxes and we are good to go but there is obviously more to Taxes then just Income Tax and we all need to safeguard ourselves from any ITR notices right.
So I want to end this post by saying that guys always try to pay all their taxes and then some as if you pay extra taxes you get them back eventually so personally, I like to be a tad bit safe in that department.
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