As the tax is deducted on the prize money only and not on the principal amount,
therefore it is not discouraging to the small investors.
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What is tax certificate?
It is a requirement of claimant to submit the same to Tax Authorities to prove the
portion of income as legal.
Whether an income tax payee is exempted from withholding tax on prize money claim?
No.
How much tax is deducted on prize money?
WHT @ 10% is deducted from prize money of Prize Bonds under Section 156(1)
of ITO 2001(Division III of part V). Further, a surcharge @15% on withholding tax on
National Savings Schemes (NSS) profit (including prize money payment on National prize
Bonds) w.e.f. 15.03.2011 to 30.06.2011 has been imposed in terms of FBR letter
No.1(36)WHT/2006 dated 28.03.2011 received vide CDNS letter No.F.13(1)(Rules)Sch-
3/2004 dated 28.03.2011.