The utility model discloses a basket dropping mechanism for an automatic incense making machine. The basket dropping mechanism is arranged above the initial end of an incense basket conveying belt. The basket dropping mechanism comprises a pair of ratchet wheel shafts striding above the incense basket conveying belt and ratchet wheels arranged on the ratchet wheel shafts, wherein the pair of ratchet wheel shafts is synchronously reversely driven by means of a driving mechanism. Stacked incense baskets are arranged on corresponding ratchets of the ratchet wheels, and the baskets drop one by one by means of opposite-direction rotation of the ratchet wheels. The basket dropping mechanism is adopted to replace labor in placing the baskets one by one in the prior art, on one hand, labor force is liberated, and on the other hand, production efficiency is improved.