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 1,000Winnings earned: Rs 30,000
Net winnings = Rs 30,000 - Rs 1,000 = Rs 29,000TDS 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.