Tax on lottery winnings.. played in UK

Tax queries 991 views 2 replies

handyzon

Accountant

26 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)

Pratik Ranjan

40 Points Posted on 20 February 2020

Straight 30% income from other sources (lottery income)

Nandakumar K Konkar

Partner

246 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.