Income tax on prize bonds, lottery winning

Income tax on prize bonds, lottery winning

Section 156 of Income Tax Ordinance, 2001 describes the income tax on prize bonds and lottery winnings.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following is the text of Section 156 of Income Tax Ordinance, 2001:

156. Prizes and winnings.—(1) Every person paying prize on a prize bond, or winnings from a raffle, lottery, prize on winning a quiz, prize offered by companies for promotion of sale, or cross-word puzzle shall deduct tax from the gross amount paid at the rate specified in Division VI of Part III of the First Schedule.

(2) Where a prize, referred to in sub-section (1), is not in cash, the person while giving the prize shall collect tax on the fair market value of the prize.

(3) The tax deductible under sub-section (1) or collected under sub-section (2) shall be final tax on the income from prizes or winnings referred to in the said sub-sections.

(Disclaimer: The text of the above section is only for information. Team makes all efforts to provide the correct version of the text. However, the team is not responsible for any error or omission.)

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