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Non-disclosure of offshore online gaming winnings channeled through e-wallets falls foul of new anti-black money law says government

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The Central Board of Direct Taxes (CBDT) in a circular dated 3rd September, 2015 (Circular 15/2015) clarified that winnings from offshore online gaming or poker websites through e-wallets like Neteller would amount to ‘foreign assets and income’ and non-disclosure of such winnings would fall foul of the Undisclosed Foreign Income and Assets (Imposition of Tax) Act, 2015 (popularly known as the ‘anti-black money’ law).

In the circular published in FAQ format, the Central Board of Direct Taxes (CBDT) has said that e-wallet or virtual card is similar to a bank account and therefore ‘the valuation and declaration of an e-wallet account may be made as in the case of a bank account’.

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The anti-black money law makes provision for penalising non-disclosure of foreign assets and income and provides a one-time compliance  window until 30th September 2015, wherein defaulters can pay sixty percent tax and penalty and avoid prosecution. A concise summary of the anti-black money law prepared by PRS Legislative Research can be accessed here.

The latest clarification by CBDT adds to the ambiguity and confusion on taxation of online gaming activities. It may be noted that remittances for gaming are not permitted as per Schedule I of the Foreign Exchange Management (Current Account Transactions) Rules, 2000.  A penalty of upto thrice the amount in question can be levied for contravention of these provisions.

Jay has researched extensively on gaming laws and has been cited by various media houses and journals as an expert. He has helped leading newspapers in their stories on gaming laws. Jay completed his B.A. LL.B. (Hons.) degree from NUJS, Kolkata in 2015 and is currently based out of Mumbai.

7 Comments

7 Comments

  1. Rahul

    September 6, 2015 at 11:58 am

    I use the E-wallets for playing poker and online gambling both.

    If i declare the same under the black money act will i be facing any charges for online gambling ?

    also please guide how to calculate for filing the declaration sir

  2. Raj M

    September 6, 2015 at 5:11 pm

    Hi,

    This is a very detrimental news. Can cripple the whole Indian gaming community. Curse be upon those who introduced this ugly law. This law is 9/11 of tax terrorism, really. Even the UPA did not show such vileness.

    Naturally, many poker players who have e-wallets or virtual cards will be quite concerned after this news.

    Since you are a lawyer and track the online gaming genre closely, I would like to know from you: does one need to make a disclosure (specially when he does Not come tax bracket) of his e-wallets like Neteller, Skrill etc. and virtual cards even when he has never used them for any withdrawals in India or elsewhere and funded them for very small amount from India? In effect, they exist in name only presently. But can be used in the future for funding and winnings withdrawals.

    Thanks

    Raj

  3. Raj M

    September 6, 2015 at 5:11 pm

    Hi,

    This is a very detrimental news. Can cripple the whole Indian gaming community. Curse be upon those who introduced this ugly law. This law is 9/11 of tax terrorism, really. Even the UPA did not show such vileness.

    Naturally, many poker players who have e-wallets or virtual cards will be quite concerned after this news.

    Since you are a lawyer and track the online gaming genre closely, I would like to know from you: does one need to make a disclosure (specially when he does Not come tax bracket) of his e-wallets like Neteller, Skrill etc. and virtual cards even when he has never used them for any withdrawals in India or elsewhere and funded them for very small amount from India? In effect, they exist in name only presently. But can be used in the future for funding and winnings withdrawals.

    Thanks

    Raj

  4. Sudhakar.G

    September 8, 2015 at 8:40 am

    Hi Sir,
    I saw your post today and i am having some questions regarding this
    1) Is this bill applicable from April 1 2016 means? We no need to file those returns of 2015?
    2) I am having one blog and i am a affiliate to some of the websites they used to gave me commission on customer basis, Money will transfer to my accoumt via skrill only. Will this applicable to those taxes?
    3) What about Adsense by google they will send money via paypal or bank check,Will this applicable to those taxes?

    Reply would be appricated from Jay or anyone
    Thanks in advance,
    Have a nice day

  5. Mukesh

    September 8, 2015 at 12:43 pm

    If I make a total of all credit side it will include my debits to poker sites also. Can I deduct the same ??

    Do I need to show both my poker account and ewallet account or just the ewallet ??

    Please help out

  6. satish

    November 7, 2015 at 11:19 am

    hi

    am a casino baccarat player from past couple of years and the worst part is i play big depositing money through my e wallets recently i won a big amount 43 lakshs and its in my e wallet neteller now what to do…dies the indian govt knows about the e wallet transactions with the e wallets give away our details or can i transfer the funds into anyother foreign account by going through visiting visa and opening an account

  7. Amarpal Singh Rawat

    November 8, 2015 at 12:46 am

    Hey Satya,

    Can you kindly brief me if I can register an online poker website in Kolkatta or Bengaluru?

    If yes than do I need to apply for any license for online poker websites in above states?

    Is it really legal to set up a live poker rooms in Calcutta and Bengaluru ?

    I will be very graceful if I could get a legit information?

    Thanks and regards,
    Amarpal

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