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Tax on lottery winnings.. played in UK

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handyzon

Accountant

21 Points Posted on 19 February 2020

An Indian citizen travelled to UK as a tourist and played a UK lottery. He won some amount. No taxes were cut in UK.

UK officials stated this -

"All lottery prizes in the UK are awarded tax-free, regardless of how much you win or which game you play. Lottery winnings are not treated as income by HM Revenue & Customs, which is the government department responsible for taxation."

When he transfers the money to India, what percentage of the winnings will be paid as taxes?

Replies (2)

Quick Summary

If you're an Indian citizen who won a UK lottery while visiting, your winnings are tax-free in the UK. However, upon transferring the money to India, it will be subject to Indian income tax. Generally, lottery income in India is taxed at a flat rate of 30%, with potential surcharges and health and education cess applicable depending on the amount won. You can transfer your winnings via Rupee Drawing Arrangement or Money Transfer Scheme, and a Foreign Inward Remittance Certificate (FIRC) will be required.

Pratik Ranjan

36 Points Posted on 20 February 2020

Straight 30% income from other sources (lottery income)

Nandakumar K Konkar

Partner

150 Points Posted on 20 February 2020

For AY 2020-21, assuming assessee is ordinary resident, 30% tax applicable u/s 115BB on lottery income. Surcharge is applicable as under: (A) Between 50 Lakhs - 1 Crore: 10% & (B) Between 1 Crore to 2 Crores: 15% (C) Between 2 Crores to 5 Crores: 25% & (D) Beyond 5 Crores: 37%. HEC @ 4% will apply on total of tax & SC. Since lottery earning is tax exempt in UK, there is no question of Foreign Tax Credit claim.

FEMA offers 2 routes for inward remittances:

(A) Rupee Drawing Arrangement: No cap on amount for non-business purposes OR (B) Money Transfer Scheme: USD 2,500 per transfer, subject to 30 transfers in FY.

FIRC (Foreign Inward Remittance Certificate) to be obtained from bank in India as proof of legitimate fund transfer.