Income tax will be levied on those who earn from online gaming platforms like Dream11, know how much tax will be levied
The government has brought the Promotion and Regulation of Online Gaming law to strictly control online real money gaming. It is mandatory for those earning from platforms like Dream11, Rummy, or Ludo to file Income Tax Return (ITR). This income is taxed at 30 percent, as well as surcharge and cess. If this income is hidden, the Income Tax Department can take legal action. Even if your total income is less than Rs 2.5 lakh, it is necessary to show the income from online gaming in ITR.
File ITR on Income from online gaming: The government is tightening the noose on online real money gaming in the country by bringing the Promotion and Regulation of Online Gaming law. Now games like Dream11, Rummy, or Ludo, in which people used to bet by investing money, have been closed. If you have also earned money through these platforms and you are thinking that no tax will be levied on it, then this may be your mistake. Under section 115BBJ of the Income Tax Act, income from online real money gaming is taxed at the rate of 30 percent. Also, while filing ITR, information about the income from online real money gaming will have to be given. If a taxpayer does not do so, then the Income Tax Department can also take legal action against him.
Who will have to file ITR?
It is mandatory to file Income Tax Return (ITR) for those earning from online real money gaming, such as Dream11, Rummy, or Ludo. Under the Income Tax Act, it is mandatory to file ITR if the TDS or TCS on your income from online gaming exceeds Rs 25,000. Even if your total income is less than Rs 2.5 lakh, you still have to show this income in ITR. Income from online gaming is taxed at the rate of 30 per cent, and losses cannot be adjusted against other income.
| Details |
Information |
| Stream |
Section 194BA of the Income Tax Act, 1961 |
| TDS Rate |
30% |
| Timing of TDS deduction |
At the end of the financial year or at the time of withdrawal |
| Rule |
TDS will be deducted on the winning amount from the winner’s account. |
| Tax Rate |
30% TDS on winnings |
Some important points
- Under section 115BBJ of the Income Tax Act, 1961, income from online real money gaming is taxed at the rate of 30 percent.
- There is no basic exemption limit, deduction, or loss set-off facility.
- If someone has income from online gaming and his total taxable income is less than Rs 2.5 lakh, then it is still necessary to show this income in ITR.
- Losses from online gaming cannot be carried forward or adjusted against any other income.
Legal action for hiding income
If the income from online gaming is not shown in the Income Tax Return (ITR), then the Income Tax Department can take legal action against that taxpayer. Under section 276CC of the Income Tax Act, 1961, action can be taken against a person if he wilfully fails to file ITR or does not respond to a notice under sections 139(1), 142(1) or 148. However, this action applies only in case of wilful default and not in case of delay or inadvertence.
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