E-Paper
Does Indian who won ₹240-crore UAE lottery pay taxes on it? It depends
The tax status of the 29-year-old Indian expat living in Abu Dhabi, identified as Anilkumar Bolla Madhavrao Bolla, would depend on where he pays taxes
Among the chief questions in people's minds after an Indian man won a massive lottery of 100 million dhirams — ₹240 crore — in the UAE recently were: if he has to pay any tax on it, and whether or not he can bring this to India.
The tax status of the 29-year-old Indian expat living in Abu Dhabi, identified as Anilkumar Bolla, would depend on where he pays taxes. There are no local UAE taxes on such lotteries, even when it's the biggest such jackpot ever won in the country. So that means he gets all the money in his bank in the UAE.
In India, however, lottery prizes are taxed at a flat 30%, followed by a 15% surcharge on the tax amount (for winnings above ₹1 crore) and a 4% Health and Education Cess on the total, as per Mint. A person would be subject to this tax if he has resident status in India.
Resident/NRI rules matter
An individual will be treated as a resident in India in any previous year if he satisfies any of the following conditions, says the government: If he/she is in India for at least 182 days during the previous year; or for a period of 60 days or more in the previous year and overall 365 days during four years immediately preceding the previous year.
If he does not fall into either of these conditions, the lottery winner would have non-resident Indian (NRI) status, and not have to pay tax in India.
But if he has resident status, the following rule would apply as per the Directorate of Income Tax: “The total world income of a resident is liable to income tax in India… even if it is not received or brought into India.”
Anilkumar Bolla is a long-time Abu Dhabi resident who has lived in the UAE for over one and a half years, said a TOI report. That should mean he does not have to pay Indian taxes.
As to whether he can bring the lottery winnings to India – irrespective of tax status — the simple answer is in the negative.
According to the Reserve Bank of India (RBI) and the Foreign Exchange Management Act (FEMA), remitting lottery winnings to India is prohibited.
So here's the simple breakdown:
- No tax in UAE
- No Indian tax if you have NRI status, depending on time spent outside India
- Indian tax will apply if considered ‘resident’, even if such income is not brought to India
- Lottery winnings anyway cannot be brought into India
What's The UAE Lottery?
The UAE Lottery’s first-ever Dh 100 million jackpot is a record-breaking grand prize. The most recent draw was held on October 18 in which the jackpot number was 251018, and it made Bolla a multimillionaire after he matched all seven numbers in the exact winning combination, defying odds of 1 in 8.8 million.
Bolla told TOI his immediate plans are simple: “I plan to buy a supercar first and treat myself to a month-long stay at a seven-star hotel.”
