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