The indian government has banned real-money online gaming platforms, but if you’ve earned money from these games before the ban, the taxman is still interested. Here’s everything you need to know.
1. Ban Does Not Erase Your Tax Liability
Just because online gaming is now banned doesn’t mean your past winnings are tax-free.
Tax laws are separate from legality.
Section 2(24) of the Income Tax Act defines income broadly, including earnings from all sources—lawful or unlawful.
If you made money, you must declare it in your ITR and pay tax.
2. Online Gaming Income Falls Under Section 115BB
Income from online gaming is taxed at a flat rate of 30% under Section 115BB.
This applies to all net winnings during the financial year.
The ban does not exempt you from paying this tax.
3. How Net Winnings Are Calculated
Let’s take an example to understand how net winnings are determined:
Deposit in gaming wallet: Rs 1,000
Winnings earned: Rs 30,000
Net winnings = Rs 30,000 - Rs 1,000 = Rs 29,000
TDS is deducted by the gaming platform before transferring the money, but this doesn’t end your tax obligations. You still need to report it in your ITR.
4. TDS Deduction and Filing Your ITR
Many players assume that once TDS is deducted, their tax responsibilities are over. This is a common misconception.
Deducted TDS reflects in Form 26AS.
Winnings must be disclosed under Income from Other Sources.
If salaried: File ITR-2.
If self-employed or running a business: File ITR-3.
5. Adjusting TDS Against Total Tax
The TDS already deducted can be adjusted while filing your ITR:
If your total tax liability > deducted TDS → pay the difference.
If deducted TDS > total tax → claim a refund.
This ensures you don’t overpay or underpay your taxes.
6. Key Takeaways for Taxpayers
Past gaming income cannot be ignored—the ban does not cancel tax liability.
Taxable at 30% under Section 115BB.
Must declare winnings in your ITR, even after TDS.
Use Form 26AS to reconcile TDS and adjust your tax liability.
7. Final Word
Even though real-money gaming platforms are banned, your previous earnings are not exempt from taxes.
The Income Tax Act treats all income equally, legal or illegal.
Failing to declare your winnings can result in notices and penalties.
💡 Bottom line: The ban may stop you from gaming in the future, but it doesn’t stop the tax department from claiming its share today.
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