3

Currently, I am working in USA on H1B visa. I came to US in JAN 2015. So for income tax purpose, I am Non-Resident Indian for financial year 2015-16.

I have query regarding lottery winnings outside India. After reading income tax rules on web, I understood that if NRI wins lottery in USA, the lottery winnings can be transferred to Indian Bank account legally.

If I win lottery in April 2016 and permanently come back to India in Jun 2016, I think I will be considered Resident Indian for financial year 2016-17. In this case, will I be able to transfer lottery won in April 2016 to my Indian bank account? Will it be considered illegal?

If yes, that means, I will have to stay in US at least till Oct 1, 2016 so that my India stay will get reduced to less than 182 days and hence I will be considered NRI for FY 2016-17. The lottery won in April 2016 will be legal in this case. Please advise. Thank You!

  • 4
    I'd be more worried about the legal ramifications of your being able to guarantee winning the lottery in the future than how to get the money back. – ceejayoz Jan 17 '16 at 14:24
  • I'd think it is always legal to transfer your money to wherever you want, no matter how you got it, or where you live. The point is probably more if and where you have to pay taxes on it? – Aganju Jan 17 '16 at 14:55
  • 1
    @Aganju This may not be fully true. India does not allow gambling [except for race horses]. It does allow select lottery and explicitly disallows gambling on external websites. – Dheer Jan 17 '16 at 15:30
  • @ceejayoz I guess that the OP would want to know what the effects of winning before deciding whether to enter. – Ganesh Sittampalam Feb 17 '16 at 7:50
  • 1
    If you've won a lottery/ would win one in the future, I'd suggest that you hire a professional to answer these questions. What is money for? – edocetirwi May 17 '16 at 14:57
2

The rules are not very clear. If you are Indian resident, you are not allowed to use Foreign Exchange outside India for betting and gambling. However even ifs its illegal; any gains are taxable.

If you are non-resident and win lottery you can transfer the gains to India and there is no tax applicable.

There is no clarity if you are non-resident and earn a lottery and then change the tax status as resident Indian. Please consult a professional CA for specific case.

  • Thanks Dheer! I am not sure, but looks like residential status for income tax is decided only at end of that financial year. So even if someone wins US lottery, it can be considered legal/illegal only on 1st April. – Sambhaji Jan 18 '16 at 6:20
  • 2
    @Sam You are right. The residential status is determined later and the Indian law is not very clear and hence may need intervention from professional CA. – Dheer Jan 18 '16 at 6:33

protected by Ganesh Sittampalam Jan 18 '18 at 22:14

Thank you for your interest in this question. Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site (the association bonus does not count).

Would you like to answer one of these unanswered questions instead?

Not the answer you're looking for? Browse other questions tagged or ask your own question.