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INCOME TAX ON EARN FROM ONLINE GAMBLING

Betting or gambling is illegal in most of India. However, there's no law that creates online card-playing associate degree criminal activity. Surveys conducted in 2020 have unconcealed that there square measure about three hundred million online gamers in India and therefore the range goes to extend quickly within the returning years. With the widespread use of the web casino firms have started casino websites giving associate degree attractive settings to play in. there's a lot of proceedings on gambling however revenue enhancement doesn't limit anyone to earn from the litigated sources. It solely says “Please Pay Tax”. So online gambling is additionally taxable.

·        RATE OF TAX

Income from gambling is taxable underneath head financial gain from other sources and is taxed at a flat rate of 30%+ 4% Cess i.e. 31.2%. Gambler isn't allowed a minimum exemption limit of 2, 50,000 obtainable to a different assessee. TDS ON PRICE MONEY RECEIVED

If the award exceeds Rs. 10,000, then the winner can receive the award when the deduction of TDS @31.2% u/s 194B. It doesn't matter whether or not the financial gain of the winner is taxable or not. The prize distributor is at risk of deducting tax at the time of payment which is able to be displayed in Form-26AS.  The gambler will take credit of TDS whereas filing a return of financial gain.

·        ON WHICH AMOUNT TAX IS NEEDED TO BE PAID

Tax is needed to be paid on the amount of the winning. It’s not needed to be paid on the number of transactions entered. For E.g.: Mr Santosh plays online casinos and has done transactions of 1 crore however has earned solely ten lacs. So tax is needed to be paid on 10 lacs and not 1 crore rupees.

·        DEDUCTIONS OR EXPENDITURES NOT ALLOWED

No deductions or expenditure incurred to earn financial gain from gambling is allowed. The winnings are measure taxable at a Flat rate of 30% + applicable Surcharge and Cess.

·        WHEN WINNINGS ARE IN KIND OR GOODS

Suppose Mr Santosh wins a car from Gambling or card-playing then the prize distributor needs to make certain that TDS has been paid subtracted on the idea of the value of the car before handing the car to Mr Santosh. The tax burden is beard either by Prize Distributor or Mr. Santosh.

·        WHEN WINNINGS MEASURE PART IN MONEY AND PART IN SIMILAR WAY GOODS

In cases wherever the prize is given each in money and type, then the overall tax ought to be calculated on the money portion of the prize and on the value of the prize given in a similar way. And therefore the tax amount ought to be subtracted whereas giving the money portion of the prize to the winner. However, if the money prize isn't decent to hide the overall liabilities, then either the winner or prize distributor ought to pay the deficit.

·        MY COMMENT

If you gamble in online casinos, please make certain that you simply file a return of financial gain.

The above comments do not constitute professional advice. The Author is reached at

santoshpatil@alltaxfin.com or visit the website web.alltaxfin.com.

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