Skip to content

NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Tax Provisions for Special Cases

Under the Income-tax Act, a resident individual's income from winnings from lottery, crossword puzzles or online games is taxed in which manner?

Winnings from lotteries, crossword puzzles and online games are taxed at a flat 30% plus surcharge and cess. No expenditure or allowance can be deducted from them, and the basic exemption limit cannot be adjusted against such income, so slab-rate treatment does not apply.

  1. AAt the normal slab rates after allowing the basic exemption limit against it
  2. BAt a flat special rate of 30% with no deduction for any expenditure or allowanceCorrect
  3. CAt 20% after deducting the cost of the ticket
  4. DExempt up to Rs 1,00,000 and taxed at slab rates beyond that

Explanation

Winnings from lotteries, crossword puzzles, card games, online games and similar sources are taxed at a flat 30% (plus applicable surcharge and cess). No deduction for expenditure or allowance is permitted. Basic exemption cannot be used against these winnings, so slab-rate treatment is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Tax Provisions for Special Cases shows your real accuracy, how long you take and where you lose marks.

Practise Tax Provisions for Special CasesFree diagnostic mock

More Tax Provisions for Special Cases questions