The applicable tax rate is 31.2% on the money won from any type of game. Usually, online gaming works on a model that is subscription-based. A willing subscriber is offered with a facility for registering. A subscriber like that will then transact using rupees using his debit or credit card. The games are played on gaming applications which are installed in the mobile devices by the users.

Online gaming has turned out to be really popular in India. It is categorized under these sections enumerated below.

The first category comprises of the real money games. Players play roulette online, poker, rummy, and fantasy sports such as fantasy cricket and football games. There are companies which are offering these as online aggregators. These providers offer a platform to users for playing the game for a prior approved user fee for various time packages.

Second is the casual or mobile-centric games. These are the ones which can be downloaded through the mobile app store such as Temple Run, Subway Surfers, and Candy Crush.

Third, in line is e-sports which involve competitive gaming and titles that are mobile-based for instance PUBG, FIFA, and Counterstrike.

How Does the Game Work?

For instance the fantasy sports section of online gaming that forms a part of the real money titles. In order to play, the user has to register on the website of the gaming company, G2G - guide to casino will show you how you have to open the account and deposit money to get started. To participate in the leagues which have been created by the website, the user will choose a team with the same number of players like in real-life sports team. After the match starts, the user will not be allowed to change the team and serves as the manager of the team. The user will join different leagues and compete against different teams. The results are generated based on the scores, statistics, and the achievements by the real team or individual player in a particular event. The prize money is going to be distributed when the result is announced in an objective and transparent manner depending on the final points of the participants in the fantasy sports game.

Tax on the Game Winnings

These games have tax implications for the user. From the perspective of the user, when a fantasy game is played, it includes money stakes. Only one winner is going to collect the maximum points and is going to take the cumulative prize money that is available to the participating user. The other participants are going to lose the money that they put in.

The question is about the taxability of money of the winner and also the tax treatment of the loss which is suffered while playing the game. The taxations for these kinds of games have been laid down under 115BB by the income tax department. The tax rate that is applicable is 31.2% along with 30% education cess on income from the winning amount of any game of this sort. There is no deduction for the expenses which is suffered by the user for playing the games. As per the tax laws, there is no means to claim or carry forward the loss. Moreover, a gaming company is going to deduct a TDS which is 31.2% of the income that a player has received from the game winnings. The TDS is going to appear in the user’s Form 26AS where they will be able to claim the credit for it against the whole tax payable when they file their tax return.