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Representative Image | Photo: Mathrubhumi
Thrissur: Onam Bumper 2022 results have come out and according to economic experts, the winners should know on tax-related deductions to avoid complications later.
The general notion among the public is that person winning Rs 25 crore will get Rs 15.75 crore. However, in reality, the person will only get Rs 12.89 crore after various tax deductions.
After deduction of 10 per cent agent commission and 30 per cent tax, the prize winner will have Rs 15.75 crore in bank account. But that is just Tax Deducted at Source (TDS).
Apart from that, the winner will have to forgo 37 per cent as surcharge as the person has more than Rs 5 crore in bank account.
4 per cent of the tax and surcharge amount combined need to be spent as health-education cess. That means Rs 25 crore winner will have a tax liability of Rs 9,61,74,000 after forgoing Rs 10 per cent as agent commission. This needs to be paid within two months of the money getting credited to bank account. If not, it will invite a fine of one percent for every month of delay.
Most of the lottery winners are unaware about this and it will lead to complication while filing tax return during the end of the year. If the winner spends the whole money won before these deductions, they will be in a fix.
The sequence of deductions are as follows:
Prize amount: Rs 25 crore
Agent commission: Rs 2.5 crore
The tax deducted directly by lottery department: Rs 6.75 crore
Surcharge to be paid: Rs 2.49 crore
Cess: Rs 0.37 crore
Total deductions: Rs 12.11 crore
That means the person will only get Rs 12.89 crore after winning Rs 25 crore.
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