Federal Taxes on Lottery Winnings in Pakistan
In Pakistan, lottery winnings are subject to federal taxes under the Income Tax Ordinance 2001. The Federal Board of Revenue （FBR） imposes a withholding tax on lottery prizes exceeding a specified threshold. According to current regulations, a 15% withholding tax is deducted at source for lottery winnings above PKR 100,000. This tax is final and covers the tax liability for the prize money.Winners must provide their Computerized National Identity Card （CNIC） details to the lottery operator for tax reporting. Failure to do so may result in a higher withholding rate. The tax applies to all types of lotteries, including national, provincial, and private lotteries approved by the government. Prize winners should retain their tax deduction certificates as proof of compliance.
It is important to note that lottery winnings are considered windfall gains and are taxed separately from other income. Unlike some countries, Pakistan does not allow deductions for lottery ticket purchases or related expenses. The tax revenue generated from lottery winnings contributes to national development projects and public welfare initiatives.
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