Investment & Gains · Section 156 · Tax Year 2026-2027
Prize Bond & Winnings Tax Calculator
Section 156 charges two different rates, which is easy to get wrong: 15% on a prize bond or cross-word puzzle, but 20% on a raffle, lottery, quiz or sales-promotion prize — each doubled off the Active Taxpayers’ List.
Reference
Section 156 rates
| What you won | On the ATL | Off the ATL | Treatment |
|---|---|---|---|
| Prize on a prize bond | 15% | 30% | Final tax |
| Prize on a cross-word puzzle | 15% | 30% | Final tax |
| Winnings from a raffle or lottery | 20% | 40% | Final tax |
| Prize for winning a quiz | 20% | 40% | Final tax |
| Prize offered by a company to promote sales | 20% | 40% | Final tax |
Division VI of Part III of the First Schedule, with the Tenth Schedule doubling each rate for a person not on the Active Taxpayers’ List. Where the prize is not in cash, Section 156(2) charges the tax on its fair market value.
Step by step
How the tax is worked out
Enter the gross prize
Or the fair market value if you won something other than cash.
Say what kind of prize it was
A prize bond and a raffle are charged at different rates.
Choose your filer status
Off the Active Taxpayers’ List, both rates double.
Check what you take home
The payer deducts it before paying you and the tax is final.
Reading the result
Deducted before the cheque is written
A prize is never paid gross. The bank or the issuing authority withholds at the point of payment, so the amount announced against a bond number is not the amount you take home.
There is no mechanism to receive the full prize and settle the tax later. Planning around the gross figure is how people end up short.
Prizes in kind are still taxed in cash
Winning a car or a plot does not avoid the charge. The tax is computed on the value of the prize, and because there is no cash in the transaction to deduct from, the winner is normally required to pay it before the prize is released. A win can therefore require money up front, which surprises people who expected only good news.
Filing does not usually recover it
Unlike most withholding, this is generally a final charge on that income rather than an advance payment credited against your annual tax. Being on the Active Taxpayer List does not make the deduction refundable. That distinction matters before you plan on getting any of it back.
Where this stops
This applies the rate you select to the prize value. The two rates on this page exist because the law distinguishes a prize bond or cross-word puzzle from a raffle, lottery or quiz — identify which yours was before reading the answer.
FAQs
Prize and winnings tax FAQs
What is the tax rate on prize bond winnings?
A prize on a prize bond or a cross-word puzzle is withheld at 15% of the gross amount under Division VI of Part III of the First Schedule, doubled to 30% if you are not on the Active Taxpayers' List. The bank deducts it when the winning bond is encashed and the tax is final.
Is a lottery or raffle taxed at the same rate?
No — and this is the most common mistake. Winnings from a raffle or lottery, a prize for winning a quiz and a prize offered by a company to promote sales are charged at 20%, not 15% — and 40% off the Active Taxpayers' List. A Rs 1,000,000 raffle win costs Rs 200,000 in tax where the same amount on a prize bond costs Rs 150,000.
What if the prize is not cash — a car or a plot?
Section 156(2) makes the payer collect the tax on the fair market value of the prize. So a non-cash win still produces a cash tax bill, calculated on what the item is worth rather than on anything you received. Enter that market value here.
Is the tax final or adjustable?
Final in both cases. It is not merged with your other income and you cannot claim it back against other tax, though you should still report the winnings in your return.
Who deducts it?
The person paying the prize — the bank encashing a prize bond, or the company or organiser paying out a raffle, lottery, quiz or promotional prize. They must deposit it and report it, which is why the figure on your payment advice should match.
Does becoming a filer help?
Substantially. The rate halves either way: 30% to 15% on a prize bond, 40% to 20% on a raffle or quiz prize. On a Rs 1,000,000 raffle prize that is Rs 200,000 saved.
Related tools
See what filing would save you
Both prize rates halve on the Active Taxpayers’ List, and the same gap runs across every withholding rate.
Open Filer vs Non-Filer Calculator