Income earned while playing online games is subject to tax under Section 115BB of the Income Tax Act, 1961, and is taxed under the head ‘Income from Other Sources’.

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Above Rs 10,000 - Tax deducted at source.

This is a welcome source of additional revenue for the government. After adding 4% cess, the ultimate tax rate for all casino and gambling earnings in India amount to 31.2%. The gaming income is to be reported at the time of filing of the gamer’s tax returns.Īs a rule of the thumb, all the income and winnings generated from online betting or casino gambling activities will incur a flat 30% tax without cess and without accounting for the basic exemption limit. You will need to declare the additional gaming income while filing your IT returns, and will be taxed accordingly. No matter where or how you gamble, you are liable to pay tax on your winnings. This has also been a key incentive for the younger generation to become full-time gamers. Even being a grey area, this is not exempted from the ambit of taxation.Īs online gaming provides an opportunity to win money while sitting at home, several people are getting attracted to become professional gamers.

In India, the law does not distinguish between games of skill and games of chance, such as rummy or poker, or between legal or illegal games. Although the laws and regulations around online gaming in India are still not clear, it is now possible for Indian gamers to gamble legally and securely, while also gaining a chance to make profits and earn an extra buck. While certain games are played for thrill, some games offer the chance to win money too.

The net result? There’s been an incredible rise in the popularity of online gaming in India. Currently, the online gaming industry is projected to have about 300 million users in India.Īs the outbreak of the COVID-19 pandemic hit India and resulted in nationwide lockdowns, gaming companies have been witnessing a huge spike in new registrations. Gaming has gone viral among millennials and has witnessed a massive growth due to the widespread adoption of smartphones, tablets, and affordable data plans.

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