In a recent circular issued by the Government of Nagaland, important guidelines regarding the payment of lottery prizes and the associated Tax Deducted at Source (TDS) have been outlined. This circular is crucial for all lottery participants and winners, as it clarifies the rules surrounding prize money and tax obligations.
Key Highlights of the Circular
Prize Payments Up to ₹10,000:
According to Rule 12(4) of the Nagaland Lotteries (Regulation) Rules 2022, distributors and their distribution networks are authorized to pay prizes up to ₹10,000 to winners on behalf of the Government of Nagaland. This means that if you win a prize of ₹10,000 or less, you can receive your winnings directly without any tax deductions.
Amendment Under the Finance Act, 2023:
The circular also refers to an amendment made by the Finance Act, 2023, specifically Section 194(B) of the Income-tax Act. This amendment states that if a person receives prize money exceeding ₹10,000 in a financial year through lottery winnings, income tax must be deducted at source (TDS). The TDS will be calculated based on the total prize money once it exceeds the ₹10,000 threshold.
What This Means for Lottery Winners
Prize Payments Up to ₹10,000:
Winners can receive their prize money up to ₹10,000 without any tax deductions. This is a significant benefit for smaller prize winners, allowing them to take home the full amount.
Multiple Winning Tickets:
If a winner has multiple tickets that collectively exceed the ₹10,000 limit, they must inform the retailer. In such cases, the payment will be made after deducting TDS from the total prize amount.
No Prize Distribution Over ₹10,000 Without TDS:
No prizes will be distributed if the prize money exceeds the ₹10,000 limit without the necessary TDS deductions being applied.
This circular serves as an important reminder for all lottery participants in Nagaland. It is essential to be aware of the TDS implications when claiming lottery prizes. Winners should keep these guidelines in mind to ensure a smooth and compliant process when receiving their winnings.
For further details or inquiries regarding the TDS deduction and prize distribution, lottery participants are encouraged to reach out to their respective distributors or retailers. Stay informed and good luck with your lottery tickets!