Can international lottery winners bring money to India?

There are universally accepted rules if a taxpayer is resident in one country but has the root of income based in another country - then the person’s income is taxed in both countries. As per the Income Tax Act, 1961, this is known as double taxation.

To avoid the issue of double taxation, you can use the agreement of double taxation avoidance between India and the other country. As per the agreement of double taxation avoidance, you can utilize any one of these two ways to avoid double taxation on your income or winnings in this case:

   ♦   Your income is taxed in only one of the two countries. As per the rules of the treaty with countries like Libya, United Arab Republic and Greece, income from interest, fees for technical services, royalty and dividend are feasible.

   ♦   Tax given in the country of the source is subtracted from the universal income and then on residual aggregate income tax is paid.

Some extra information which may be of help to you:

   ♦   You will get a tax break in India if you are a resident/citizen of India having to report universal income in India.

   ♦   The tax break will be to the aggregate of tax paid in the respective country or Tax payable in India whichever is lesser.  In other terms, you will not get reimbursement for taxes paid outside of India.

   ♦   If you are playing an online lottery, tax as per the laws of the base country will be cut.

 [Extra information - the tax due on lottery winnings is thirty per cent plus cess and expense.]

   ♦   Besides the return, you have to file a form (numbered 67) which furnishes the details of taxes paid and the factual/written evidence of the taxes that are declared to have been cleared abroad.

   ♦   Expect a limited survey for confirmation of the Foreign Tax Credit declared specifically because it will be a huge figure.

Some of the renowned advocates say that:

One doesn’t need to take the burden of tax again, in India in some cases.  If the person is an Indian resident, all his/her remuneration from all sources, counting any foreign remuneration will be taxable in India. Since the person has already paid tax in the other country, he/she will be given acknowledgment of that tax paid in that respective country by the Income-tax body in India under the tax treaty between the country and India. One should keep this in mind that if there happens to be any rate difference in tax in India, you have to pay that amount.

Whether you win abroad or win an international lottery, it is best to contact a tax lawyer to pay your taxes and avoid fines.