TDS payable on Lottery - Luck and Draw - Car
This query is : Resolved
RUPALI GAONKAR
(Querist)
17 January 2026
Sir,
Need the detail for TDS deduction on the luck and draw coupans- prize Car
Need the detail for TDS deduction on the luck and draw coupans- prize Car
Dhirajlal Rambhia
(Expert)
17 January 2026
Winnings from lucky draws, lotteries, or crossword puzzles, including prizes in kind like a car, are subject to a flat Tax Deducted at Source (TDS) under Section 194B of the Income Tax Act.
The standard tax rate is a flat 30% of the prize's value. Including the mandatory 4% Health and Education Cess, the effective TDS rate for 2026 is 31.2%.
Before the car can be released to the winner, the organizer must ensure the tax has been paid to the government. The winner typically has two options:
Pay the required 31.2% tax amount in cash to the organizer, who then remits it to the government.
The organizer bears the tax liability, but this tax amount is then treated as additional income for the winner and must be "grossed up".
The standard tax rate is a flat 30% of the prize's value. Including the mandatory 4% Health and Education Cess, the effective TDS rate for 2026 is 31.2%.
Before the car can be released to the winner, the organizer must ensure the tax has been paid to the government. The winner typically has two options:
Pay the required 31.2% tax amount in cash to the organizer, who then remits it to the government.
The organizer bears the tax liability, but this tax amount is then treated as additional income for the winner and must be "grossed up".
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