Yes, according to the Income Tax Act, 1961, winnings from lotteries or prize money in competitions are subject to income tax. A flat tax rate of 30% applies on winnings, and the basic exemption limit is not applicable to them.
The tax on such winnings is deducted at source, and the individual receiving the prize is required to report it as income while filing their tax return. In this situation, the entity presenting the prize will often subtract tax at source (also known as TDS) from the winnings and give the remaining amount to the recipient.
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