Casual Income: Winning from Lotteries, Crossword Puzzles, etc. [Sec. 92(2)(b)]
by Under Section 92(2)(b) of the Income-tax Act, 2025, certain casual and windfall receipts are chargeable under the head “Income from Other Sources.” These include winnings from lotteries, crossword puzzles, races including horse races, card games, gambling, betting and other games of any sort. Such receipts arise mainly from chance, luck or competition rather than from regular employment, business or investment activities. The Act specifically brings these winnings within taxable income and provides special rules regarding their computation and taxation.
1. Winnings from Lotteries
Lottery winnings represent amounts received by a person on winning a lottery conducted through tickets, draws or similar schemes based substantially on chance. Under Section 92(2)(b), such winnings are taxable under Income from Other Sources. The entire taxable winning is included in the assessee’s total income according to the special provisions applicable to such receipts. Expenses incurred for purchasing lottery tickets or earning the winning are generally not deductible while computing taxable lottery income. Tax is imposed at the special rate prescribed by the Act, rather than the normal slab rate. Therefore, lottery winnings receive separate tax treatment because of their casual nature.
2. Winnings from Crossword Puzzles
Income received from winning a crossword puzzle is specifically included among taxable casual receipts under Section 92(2)(b). Such winnings may arise from competitions conducted through newspapers, magazines, digital platforms or other recognised modes. The winning amount is chargeable under Income from Other Sources, subject to the applicable provisions of the Act. No deduction is ordinarily permitted for expenses incurred in participating in or earning such winnings. Therefore, expenditure such as entry fees or related expenses cannot generally be reduced from the winning amount. The taxable amount is subject to the special tax treatment prescribed for such casual or windfall income under the Income-tax Act, 2025.
3. Winnings from Races including Horse Races
Winnings arising from races, including horse races, are covered within the specified casual receipts under Section 92(2)(b). Where an assessee receives prize money or winnings from such races, the amount is generally chargeable under the head Income from Other Sources. Such winnings are treated separately from ordinary business, salary or investment income. Expenses incurred for earning the winnings, including amounts spent on participation or betting, are generally not allowed as deductions against the taxable winning. The taxable amount is consequently determined without reducing such expenditure and is charged according to the special tax provisions applicable to winnings from races and similar activities.
4. Winnings from Card Games and Other Games
Section 92(2)(b) also covers winnings from card games and other games of any sort. The expression is broad and brings within taxation prize money and winnings from games falling within the statutory description. Such income is generally assessed under Income from Other Sources unless another specific provision applies. The taxable winning is determined without allowing ordinary deductions for expenses incurred in earning or participating in the game. Accordingly, entry charges and similar expenditure cannot normally be deducted from the winnings. These receipts are subject to the special tax treatment applicable to winnings, ensuring that casual gains from gaming activities are separately recognised for income-tax purposes.
5. Gambling and Betting Winnings
Amounts received from gambling or betting are also expressly covered by Section 92(2)(b). This includes taxable winnings arising from bets or wagers on events and other activities covered by the provision. Such winnings are generally chargeable under Income from Other Sources, irrespective of whether they are received occasionally or constitute a substantial receipt. Ordinary expenditure or losses incurred for earning a particular winning are generally not deductible from such income under the special computation rules. Consequently, the taxable amount is determined according to the provisions governing these specified winnings. Such income is then subjected to the special rate of tax prescribed under the Income-tax Act, 2025.