Regardless of how you acquired your earnings, the government wants a minimum of 30%.
No matter where and how you won money playing any game – from a live casino show to an internet fantasy sports competition to a sweepstakes without license – you owe a lot of it to the government, which is actually more than 30%.
Whether you made such gains legally or illegally, it makes no difference to the Treasury in terms of taxes; either way, you must pay what is due. SevenJackpots’ most recent study, “Income Tax on Gambling Winnings”, reveals this element of India’s gambling winnings tax law.
The report notes that the Union Money Tax Act unequivocally states that “all income from legal and illicit transactions is liable to tax”. Pursuant to Section 115BB of the Act, this also applies to “any income derived from the winnings of any lottery, crossword game, race, including horse racing (…), or card game, or other game of any kind, or to gamble or bet in any form or character.”
Personal income tax for gambling winners is administered by the Income Tax Department under the Central Board of Direct Taxes (CBDT), a division of the Revenue Department of the Ministry of Finance of The union. This contrasts with corporate taxes for gaming operators, which can vary from state to state.
All income from casino apps and browser games, fantasy sports and skill games sites, lotteries, horse racing, and any other gaming activity that exceeds the annual non-taxable minimum of $10,000 are subject to a flat tax of 30% plus certain supplements. .
All income tax payments are subject to Cess health and education, which increases their value by 4% and brings the effective tax rate to 31.2%. Cess revenues, as its name suggests, are intended to support important national initiatives in health and education.
For winnings above Rs 50 lakh or Rs 1 crore, respectively, there are additional surcharges of 10 or 15%. Except in lotteries, winnings of this size are rare in games. Typically, when a large jackpot is won at an online casino, the platform distributes the winnings in a number of different transactions.
Majority of India-based online and land-based gaming platforms subtract necessary taxes as per law before distributing the winnings in the form of withholding tax (TDS). On the other hand, most offshore gambling websites remit all winnings to players, who are then responsible for reporting and paying applicable taxes.