Govt Imposes Up to 20% Tax on Prize Bond, Lottery Winners

The federal government has imposed a fixed tax rate of up to 20 percent on winnings from prize bonds and lotteries through Finance Bill 2024. A fixed tax rate of 15 percent will now be applicable on winnings from prize bonds or crossword puzzles. The government has imposed a 20 percent tax rate on winnings from raffles, lotteries, and prizes won from quizzes conducted for promotion of sales. Meanwhile, the government has imposed a 10 percent tax on investments in Sukuks made by any individual and Association of Persons (AOPs) whose return on such an investment is less than Rs. 1 million. Additionally, there is a 25 percent fixed tax on any company or entity that invested in the Sukuk. For returns above Rs. 1 million, the individual or AOP investor will pay a 12.5 percent tax, while the entity or company will continue to pay a 25 percent tax.