NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Income from Other Sources
Which of the following is correct regarding winnings from lottery or crossword puzzles for a resident individual?
Winnings from lotteries or crossword puzzles are taxed at a special flat rate, currently 30% plus surcharge and cess, under Income from Other Sources. No expense or deduction can be claimed against them, and slab rates do not apply.
- AThey are taxed at slab rates after the basic exemption
- BThey are taxed at a special flat rate without deduction of any expenditureCorrect
- CThey are fully exempt up to Rs 1,00,000
- DThey are taxed under Capital Gains
Explanation
Winnings from lotteries, crossword puzzles, races and similar games are taxed under Income from Other Sources at a special flat rate of 30% (plus surcharge and cess). No expenditure or allowance is deductible against them, and basic exemption cannot be adjusted for them.
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