Business
FAQ on taxes and gambling winnings
Despite the earlier post giving various provisions on taxes on gambling winnings, we have been receiving hundreds of queries seeking clarifications on the amount of tax to be paid on gambling winnings and different circumstances under which an exception can be sought from paying tax at source on gambling winnings. We have thus collated a few practical scenarios in a FAQ format clarifying different tax related aspects concerning gambling, lottery and betting winnings. The position of law has been clarified by Hersh Sayta of Ernst & Young and other eminent Chartered Accountants, lawyers and poker players having practical experience in the subject.
1. What is the rate of Income Tax payable on winnings from any card games, lotteries or other gaming activities?
As per Section 115BB of the Income Tax Act the current rate of Income Tax (as on financial year 2013-14) on poker winnings or winnings from any such card games etc. is 30%. However there is education and higher education cess payable on the taxable amount and hence the total effective amount of tax payable is 30.90%.
Section 2(24)(ix) of the IT Act defines card games and lotteries as follows:
Any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever.
[Explanation.For the purposes of this sub-clause,
(i) “lottery” includes winnings from prizes awarded to any person by draw of lots or by chance or in any other manner whatsoever, under any scheme or arrangement by whatever name called;
(ii) “card game and other game of any sort” includes any game show, an entertainment programme on television or electronic mode, in which people compete to win prizes or any other similar game.
Section 115BB reads as follows:
Tax on winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever.
Where the total income of an assessee includes any income by way of winnings from any lottery or crossword puzzle or race including horse race (not being income from the activity of owning and maintaining race horses) or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, the income-tax payable shall be the aggregate of
(i) the amount of income-tax calculated on income by way of winnings from such lottery or crossword puzzle or race including horse race or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, at the rate of 21[thirty] per cent; and
(ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i).
2. Are organisers compelled to deduct Tax at Source (TDS) on poker winnings?
As per Section 194B of the Income Tax Act, on any winnings above Rs. 10,000/- (as per laws prevailing in financial year 2012-13) it is the responsibility of persons organising or managing the event to deduct 30.90% tax before releasing the winnings.
Section 194B reads as follows:
Winnings from lottery or crossword puzzle.
The person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle or card game and other game of any sort in an amount exceeding ten thousand rupees shall, at the time of payment thereof, deduct income-tax thereon at the rates in force :
Provided that in a case where the winnings are wholly in kind or partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of the winnings, the person responsible for paying shall, before releasing the winnings, ensure that tax has been paid in respect of the winnings.
3. Are organisers required to give a TDS certificate when tax is deducted on winnings?
Yes, as per Section 203 of the IT Act and Rules framed thereunder TDS certificate has to be supplied by the deductor to the deductee within one month from the end of the month during which the credit has been given or the sums have been paid. [See this link for more information].
4. If prizes are awarded instead of cash, does TDS still have to be deducted?
Yes, TDS has to be deducted to the extent of 30.90% of the value of the gift/prize or the organiser has to ensure that the winner pays the tax amount upfront.
5. What is the liability for not deducting TDS?
Organisers or those responsible for the event can potentially face various liabilities for not deducting TDS and they would have to pay the amount payable, interest and other penalties from their own pockets if the amount is not deducted. Further, prosecution can be initiated for non-deduction of TDS and there is a maximum punishment of seven years imprisonment and fine. [See: Sections 201(1A), 221, 276B of the Income Tax Act].
6. Are set-offs permitted before deducting of TDS?
No, set-offs or any deduction/adjustment of costs etc. would not be permitted before deduction of TDS.
7. Is there any liability to deduct additional surcharge over and above the 30.90% TDS in case of gambling winnings?
As per the Finance Bill 2013, an additional surcharge is proposed to be levied on income from gambling under Section 115BB as TDS deductions under Section 194B on amounts exceeding specified limits. The manner and rates at which this surcharge is to be levied has not yet been notified.
Update: As per the Finance Bill, 2013 the following surcharge will be levied on the TDS deducted as per Section 194B:
The amount of tax so deducted shall be increased by a surcharge in the case of
(i) every non-resident (other than a company) at the rate of ten per cent. where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees ;
(ii) every company other than a domestic company at the rate of two per cent. where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees but does not exceed ten crore rupees ;
(iii) every company other than a domestic company at the rate of five per cent. where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds ten crore rupees.
For Income Tax on gambling winnings in terms of Section 115BB the following surcharge shall be levied:
| Total income | Rate of surcharge for domestic companies | Rate of surcharge for foreign companies |
| Up to Rs. 1 crore | NIL | NIL |
| Over Rs. 1 crore | 5% on tax to be paid | 2% on tax to be paid |
The provisions relating to surcharge shall be applicable w.e.f. 1st April 2013.
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umesh.sidigonde
July 9, 2013 at 5:56 pm
If in marriage function playing card game by individual to who Tax audit u/s44AB and 44AA is applicable
Q)That individual is required to deduct TDS or nor?
Q)IF yes what are provisions will attracts as per Income Tax
Q)What is the %?
Q)It is one time activity!
Jay Sayta
July 9, 2013 at 6:11 pm
The person who is organising the marriage function/card game has the onus of deducting TDS is amount of prize/cash is greater than Rs.10,000/- then he has to deduct 30.9% TDS before giving the winnings, if the amount is less than that then the winner has to himself pay the requisite tax while filing the returns.
ravi
September 7, 2013 at 12:52 am
What if the money is received from case 1 . In foreign currency case 2. Indian currency do we have to pay 30.9% tax in both the cases
Jay Sayta
September 7, 2013 at 9:03 am
Yes tax has to be paid in any case.
BHABANI SHANKAR DHAL
November 8, 2013 at 6:29 pm
I have winning a lottery more than 1 crore ,then is it possible to deduct the amount of income tax of 30.9% acording to act secction 115bb from the winning amount directly although it was in the form of foreign currency. please reply me to my email.
my email is [email protected]
Jay Sayta
November 8, 2013 at 6:32 pm
In case of foreign winnings, onus might be on you to pay the taxes and may depend on DTAA with the other country and FEMA restrictions.
Ram
November 19, 2013 at 9:25 pm
Hi Jay,
I have a query, I won 10 lakhs in Goa casino but they not provided any proof of winning but i need to deposit in Bank and need to file the tax but what should i mention as prrof income if they not provided any?
Please guide me..
Jay Sayta
November 21, 2013 at 6:12 pm
If they have deducted TDS, then they are obligated to give a TDS certificate, else you can only show it as gambling winnings under Section 115BB of the Income Tax Act during final returns.
MADHU
December 31, 2013 at 11:01 am
I WON A PRIZE OF 40000/- IN SIKKIM LOTTEREY. I HAVE NOT ANY OTHER INCOME. TDS DEDUCTED FROM MY PRIZE AMOUNT WILL BE REFUNDED TO ME AFTER FILING INCOME TAX RETURN OR NOT.
Jay Sayta
December 31, 2013 at 3:58 pm
You would have to consult your tax expert/CA though it seems that this TDS may not be refundable.
Nachi
January 4, 2014 at 11:32 am
If I am playing with my money for which i have payed tax and my friend is playing with his money for which he has paid tax. In a game with just the two of us, why would either of us be taxed on the winnings?
Jay Sayta
January 4, 2014 at 12:51 pm
Technically tax still will still have to be paid though since there is no owner/organiser, TDS deduction may not be made.
shraddanand dsouza
January 27, 2014 at 7:13 pm
As per Section 194B of the Income Tax Act, on any winnings above Rs. 10,000/- (as per laws prevailing in financial year 2012-13) it is the responsibility of persons organising or managing the event to deduct 30.90% tax before releasing the winnings.
My question is
– Suppose i win Rs. 20,000 in a poker game , as per the Income tax act, TDS will be deducted on entire Rs 20,000 or will it be on 10,000, as the law says TDS any winnings of above 10,000.
Please suggest
Jay Sayta
January 27, 2014 at 8:01 pm
TDS would be on winnings of Rs. 10,000/-
shraddanand dsouza
January 28, 2014 at 2:36 pm
I won Rs. 15300/- in a rummy game. But i got only Rs 12,088/-. So i was charged a TDS of Rs. 3,212/-.
Please note: Table joining fees was Rs 3000/- of which 15 percent(i.e Rs.450) will be organizers service fees.
I want to know if this was correct or did they charge more TDS.
Pravin
February 5, 2014 at 2:49 pm
Hi Jay Sayta
If I open Online Account in any Casino site & I have deposited some amount in this Account. After that Any other Person (like my Friend) are deposited more money in my Account.
If I Withdraw this money without playing or any winnings it is Taxable ?
How much tax apllicable for this?
Pls. Reply me on my E-mail : [email protected]
Thanks
Sidharth
March 13, 2014 at 9:20 pm
Hi ,
If a senior citizen wins a lottery of 30 lakh and he has no other income. and TDS is deducted for the winning prize. Is he liable to file income tax return?
Jay Sayta
March 14, 2014 at 7:28 am
Yes TDS will be deducted and returns have to be filed in this case.
ayush khandelwal
March 17, 2014 at 11:03 pm
Hey, I have won 8000$ in poker. But I dont know how to file income tax. Can you please explain the procedure to file income tax. My email id [email protected]
Jay Sayta
March 17, 2014 at 11:14 pm
Kindly consult and take the services of a professional accountant for the same.
pooh
May 22, 2014 at 5:50 pm
I just saw this article on Hindustan Times which says that poker is a legitimate sport in 23 Indian states.
http://www.hindustantimes.com/specials/cricket/t20/chunk-ht-ui-t20-spotfixing/sports-betting-legal-in-sikkim-but-sites-scared/sp-article10-1070497.aspx
And there are even verdicts in India to the effect that poker is a game of skill. Despite all this, does FEMA law still apply when remitting poker winnings in India? And what do you think are the chances that the new govt can make positive changes to existing gambling laws? Thanks.
Jay Sayta
May 22, 2014 at 6:28 pm
Its not correct to say that poker is legal in 23 states. There is no conclusive position or verdict to back this. As regards elections and new government’s likely piece on gambling legislation you can read this http://glaws.in/2014/05/election-results-2014-and-impact-on-the-indian-gaming-industry/
pooh
May 22, 2014 at 9:48 pm
Thanks Jay. And what is the punishment for remitting poker winnings apart from fine up to 3 times the remitted amount?
Jay Sayta
May 23, 2014 at 9:30 am
No other punishment except fine.
Glinda
July 13, 2014 at 9:38 pm
Does a person who has no other income and their yearly winnings are under say 150k have to file returns for the said winnings?
Also if a person does have taxable income but their net winnings in card games are less than net losses, does this have to be reported when they file their tax returns?
amit
July 27, 2014 at 12:29 pm
If you have any winning then you have to pay income tax 30%.example if your winning is 5 lakh and losses is 6 lakh the you have to pay tax 30% of 5 lakh = 1.5 lakh.(no loss can be set off against gains from within lotteries, crosswords, puzzles, card games or other gambling under section 58(4)).
Glen
July 10, 2014 at 7:27 pm
Hi,
Does a person who has no other income and their yearly winnings are under say 150k have to file returns for the said winnings?
Also if a person does have taxable income but their net winnings in card games are less than net losses, does this have to be reported when they file their tax returns?
m venlateswarlu
July 31, 2014 at 12:32 pm
I don’t have any income sources I bet on horses can i claim the TDS deducted on winnings lf i can claim what is the maximum amount pl. let me know.
Thanks
Venkat
john
August 8, 2014 at 8:05 pm
i wanted to know if i win a huge amount in london gambling site while withdrawing funds from neteller will it be a problem..? like i have done previously to my frnd 20000 and 20000 each time! and twomorrow if i win 30lakhs then what can be the legalities i can face i am from AP state right now!
Mayor
January 26, 2015 at 11:58 pm
I have the same question… Please help us out… Thanks…:)
Jay Sayta
January 27, 2015 at 11:13 am
Mayor- it will be a FEMA violation and potentially there can be proceedings against you under Income Tax as well as FEMA Ac.
santosh
October 14, 2014 at 11:28 pm
if a Indian citizen who goes on a tour abroad wins a lottery and that country the winning is tax free does the person still have to pay over here for his winnings and on the contra if the if he wins a lottery in a foreign country and tax is deducted in that country does he still have to pay the tax.
Jay Sayta
October 15, 2014 at 12:05 pm
If there is no DTAA mentioning gambling/lotteries with the foreign country, you will have to declare and pay Income Tax in India.
Bhupesh
November 21, 2014 at 4:19 pm
While on a foreign trip if I win big amount in the casino , will I have to declare the same at airport on arrival . Normally casino does not give any receipt
. How will I prove the winnings
Raj
February 1, 2015 at 5:51 pm
My friend and I (Indian Citizens), are in Canada on Work visa. My friend won lottery of $1M. There are no tax on winnings in Canada. Do he need to pay tax to Indian Government? What if he just want to keep his winning in Canada, not transfer any money to India at all, does he still need to pay taxes to Indian government.
viswanadh
March 15, 2015 at 9:34 am
Sir,
I am a regular purchaser of big ticket USE. IT’S price is always above 4 Crores of Indian rupees.I am working here with residents visa for the past 4 years.
so if I win this huge amount, is it required to pay tax in India.
And please tell me, what is DTAA.is it applicable to Big ticket Abudhabi,Please replay.Thank you.
Regards,
viswanadh
Ignatious D'Souza
May 7, 2015 at 10:01 pm
If a NRI while he is abroad wins a European Lottery, can he transfer the money to his NRE account? What about tax?
raju
May 16, 2015 at 12:44 pm
Hi,
I won 100 euros in online lottery its London based website. while withdrawing that amount I am not able to get that, because Indian banks not supporting to get any type of gambling amount. Is that true?
How I may get that amount?
Please suggest me.
rajesh
May 24, 2015 at 7:57 pm
hi
my friend won 26000/- in horse race in hyd.he does not have any other income.but he pay tds 7800/-. not only time he win many tickets in horse racing and paid tds. how can he get back tds amount.
Vivek
August 15, 2015 at 1:08 pm
Sir,
I have won a small amount of Rs. 238/- from Intution games from foreseegame.com is that amt should be included in my total income or tds should be deducted?
Jay Sayta
August 16, 2015 at 6:28 pm
you have to report this in your total income but no tds is payable
chethan
August 19, 2015 at 11:55 am
hi
i have won total rs 98000 in card game in the financil year 2014-15 and my salary income was rs 86000 Hence total 38000 tds dedctuted including salary and winnings on cards..now i have filed the ITR where my auditor is showing that only 9000 refund and he dedctued 28000 as tax payble.. is it right???
chethan
August 19, 2015 at 12:05 pm
hi
my total earnings in financial year 2014-15
winnings on card game-98000 and tds deducted for this is 38000
toatl salary income was 86000 and tds deducted rs 9000
now in ITR there is only 9000 refund.. my qus is that total tds 38000 shuld be refund right?? or is there any tax payble for winnings on cards????
Vikas Gupta
September 16, 2015 at 5:23 am
Hi , Anyone please reply to my following query
I have a full time job on which i pay tax and i also pay taxes on fd’s and rd’s in my bank account.
Now lets say i deposited 10000 amount in 5 different poker websites online (1 international and 4 national).
So my total spend is 50000 rs. Now i withdrawn 30000 rs from national one in my account.
Do i need to pay tax on this 30000 Rs ??? If yes, then why ? My total spend in this case is 50000 Rs.
How do i state all these in my tax form ????
please reply anyone
Vishal Singh
December 15, 2015 at 8:28 pm
I won Samsung Galaxy S6 Edge Plus in a contest & now they are asking for ₹17070 as gift tax. Is it really, if someone wins prize instead of cash he has to pay tax. Plz guide me.
Jay Sayta
December 16, 2015 at 10:25 am
Yes- but it is not gift tax, it is 30% income tax.
Utpal Borah
December 18, 2015 at 12:07 am
Dear Sir,
If anybody from India wins a foreign lottery jackpot like powerball / megamillions then what will be the tax rate. Say for example if any one wins 1 million then what will be the tax rate. How much tax will be deducted from his winnings ? Usually us federal laws deducts 30 % tax from the winnings of the lottery. Then if anyone from India wins the jackpot then in India whether I have to pay another 30.9 % from my winnings I.e. I have to pay 60.9 % as tax. Is it so plz clarify this ?
Utpal Borah
December 18, 2015 at 12:07 am
Dear Sir,
If anybody from India wins a foreign lottery jackpot like powerball / megamillions then what will be the tax rate. Say for example if any one wins 1 million then what will be the tax rate. How much tax will be deducted from his winnings ? Usually us federal laws deducts 30 % tax from the winnings of the lottery. Then if anyone from India wins the jackpot then in India whether I have to pay another 30.9 % from my winnings I.e. I have to pay 60.9 % as tax. Is it so plz clarify this ?
Narendra
January 2, 2016 at 9:02 pm
Hi Jay,
I have a same question as Utpal. Hoping that you would throw some light on the query…
Jay Sayta
January 3, 2016 at 9:14 am
yes you have to pay tax again in India
Jobee
January 5, 2016 at 7:22 pm
I’m a non resident and suppose if I win a lottery on 4 crores in India. What would be my tax liability?
Amit Ganthade
January 15, 2016 at 9:55 am
I won 38000 in casino last month I m a government employee I file my return every year. Now how to file gambling winning returns. As I only know 30.9% tax to be paid on gambling winning. Plz tel me how to file returns and is it illegal for me
Jay Sayta
January 15, 2016 at 10:55 am
Its not illegal, you only need to disclose the winnings and pay tax.
Sam
January 17, 2016 at 7:30 pm
Currently, I am working in USA on H1B visa. I came to US in JAN 2015. So for income tax purpose, I am Non-Resident Indian for financial year 2015-16. I have query regarding lottery winnings outside India. After reading other Q/A in this blog, I understood that if NRI wins lottery in USA, the lottery winnings can be transferred to Indian Bank account legally. If I win lottery in April 2016 and permanently come back to India in Jun 2016, I think I will be considered Resident Indian for financial year 2016-17. In this case, will I be able to transfer lottery won in April 2016 to my Indian bank account? Will it be considered illegal? If yes, that means, I will have to stay in US at least till Oct 1, 2016 so that my India stay will get reduced to less than 182 days and hence I will be considered NRI for FY 2016-17. The lottery won in April 2016 will be legal in this case. Please advise. Thank You!
suraj Singhal
January 22, 2016 at 5:58 pm
whether casino services should levy service tax ? However betting ,gambling and lottery are covered in negative list.and auxiliary services are levy service tax.
Plz give advise on my email id. My email id is [email protected].
Thanks & Regards
Suraj Singhal
Jay Sayta
January 23, 2016 at 12:11 pm
No service tax is applicable on casinos. The rationale is that a gaming tax is already being levied on them by the state governments.
Anand
January 27, 2016 at 12:44 am
Very Informative. Was doing some research for my startup and got most of my queries answered – through the article and by responses to comment. Thanks Jay.
Karthi
January 30, 2016 at 2:26 pm
What if someone wins an European Lottery through online and If the amount is remitted to India will it be considered Illegal ? Will the amount be fined or just we need to pay the tax ?
Murthy
February 4, 2016 at 12:11 pm
Hi Jay,
Thanks for the nice article! I have won a car worth Rs. 6,55,000/- in a lucky draw. Does the amount of tax I need to pay depend on my income tax slab? or Is it a flat 30.9%?
Thanks,
Murthy
Prabhakar
February 27, 2016 at 2:43 pm
Dear satya sir
Today I have won ₹32630.81 for playing online rummy at RummyCircle.com But management has deducted Tax at source ₹9789.24. What is the present Rate for online card games and also I didn’t earn any income still .is it recover on the base of no earnings
Jay Sayta
February 27, 2016 at 4:59 pm
The TDS rate is 30% + surcharge. Refund will not be given even if your total income is below the slab rate as this category of income is treated separately.
Monimoy Deb
March 2, 2016 at 3:31 pm
Hi brother, thanks for providing valuable information regarding gambling laws. My question question is that betting at 365bet.com or other UK based bookmakers is legal or illegal? And if legal, is tax deduction necessary?
Pritam
March 2, 2016 at 3:33 pm
Is betting at 365bet.com or other UK based bookmakers is legal or illegal ????
Jay Sayta
March 3, 2016 at 10:32 am
Its a violation of exchange control regulations to bet real money on offshore bookmakers hence it has to be done at your own risk
Ajay mehta
March 4, 2016 at 6:00 pm
Hi – One straight question per this scenario:
Total income = My poker winnings = 10,00,000
TDS paid = 3,00,000
Can I claim some back through showing expenses such as support staff, Charity to NGO, etc? Or there is no way to get any refund on card winnings?
Jay Sayta
March 4, 2016 at 6:42 pm
No- you cannot claim it back using these expenses.
Hardik
March 16, 2016 at 8:56 am
Hi Jay
I am a resident of Chennai (Tamilnadu) where sale of physical lottery tickets is banned since years. My question to you is:
1. Can I play international online lotteries like U.S Powerball, Megamillions, U.K lottery etc by registering in websites like thelotter.com or playhugelottos.com?
2. In case if I win huge sum, how can I get the amount transferred to my bank account? Is it legal to receive funds?
3. What are the taxes applicable as per our indian laws? U.S government charges 30% federal tax on winning lottery amount whereas U.K lottery winnings are tax free. How much total tax I have to pay?
4. Is DTAA applicable on winning lottery amount from U.S or U.K in their respective currencies? If yes, then please let me know on DTAA tax rates or total tax I need to pay keeping in mind the above scenarios.
Please advise as this would be helpful for me to proceed accordingly.
Regards,
Hardik
3. What
Jay Sayta
March 16, 2016 at 12:44 pm
No to all the above
Hardik
March 16, 2016 at 8:59 am
Hi Jay
I am a resident of Chennai (Tamilnadu) where sale of physical lottery tickets is banned since years. My question to you is:
1. Can I play international online lotteries like U.S Powerball, Megamillions, U.K lottery etc by registering in websites like thelotter.com or playhugelottos.com?
2. In case if I win huge sum, how can I get the amount transferred to my bank account? Is it legal to receive funds?
3. What are the taxes applicable as per our indian laws? U.S government charges 30% federal tax on winning lottery amount whereas U.K lottery winnings are tax free. How much total tax I have to pay?
4. Is DTAA applicable on winning lottery amount from U.S or U.K in their respective currencies? If yes, then please let me know on DTAA tax rates or total tax I need to pay keeping in mind the above scenarios.
Please advise as this would be helpful for me to proceed accordingly.
Regards,
Hardik
sa
March 18, 2016 at 1:28 am
Hi Jay,
Just read all the comments on your previous blog regarding the taxes on gaming but those comments were a few years old. So just wanted to confirm a few scenarios according to latest laws. Request you to read carefully, I would interchange INR and USD which is majorly my area of concern.
Scenario 1.
I have a Neteller Account in INR. I use my Credit Card to deposit Rs. 10k in my Neteller account. But the money that gets deducted from my bank account is in USD.
Now, I deposit that money in Bet365.com which is also in INR, win a fortune (Rs. 2 crore) by betting on Cricket matches. So, I withdraw Rs. 2 Crore in my Neteller account in INR.
Now, I withdraw 2 core from Neteller to my bank account in INR.
Scenario 2.
I have a Neteller Account in INR. I use my Credit Card to deposit Rs. 10k in my Neteller account. The money that gets deducted from my bank account is also in INR. (<- here is the difference.)
Now, I deposit that money in Bet365.com which is also in INR, win a fortune (Rs. 2 crore) by betting on Cricket matches. So, I withdraw Rs. 2 Crore in my Neteller account in INR.
Now, I withdraw 2 core from Neteller to my bank account in INR.
So my questions are:
1.) In which scenario will I be subjected to FEMA regulations?
1.1) In case of no FEMA, can I just pay 30% tax = 60 lakhs and get to keep the rest 1.4 crores?
2.) If I declare this 2 Crore as Gambling winnings, what kind of criminal offence will it be?
2.1) Will I have to serve jail time or just a fine?
2.2) What would be the amount I would have to pay as a fine?
Thanks a lot in advance.
Keep up the good work.
Shiv
March 18, 2016 at 4:34 pm
Can an Indian on tourist visa to Europe play any European lottery & in the event of any jackpot or big win open bank account with that money in European country utilise those money in europe after paying applicable taxes? Secondly Is there provision for remitting those money in India after paying taxes? However what I know is that being Indian resident can play any foreign lottery if he reside in foreign country on whatever Visa type but has to pay income tax as a global income under heading income from other sources? I don’t think FEMA Act is violated since money is not remitted from India to play the games however money is used to purchase ticketin foreign soil itself which states that it is legal for any foreign person to play provided ticket has been purchased through licensed retailer? Will appreciate your prompt response on this!
Niraj jalan
March 21, 2016 at 10:07 am
What laws are applicable for opening a online fantasy and prediction gaming website in India – which does not involve any exchange of money – but the company will be registered in India. Is there any regn fees to be paid to any organisation or any approvals needed from any government departments or law agencies or sports authorities? And if there are prizes (in kind) to be given to winners, what rules have to be followed?
cletus
March 31, 2016 at 1:10 am
People with Nri accounts must also pay 30 percent tax on winning a lottery in India.
arun
April 2, 2016 at 6:14 pm
for example if i win Rs 50000 in one year from poker
every month Rs 4166 should i have to pay income tax on this
50000/12= 4166
arun
April 2, 2016 at 9:00 pm
if i earn Rs 50000 from poker in one year means Rs 4200 per month from poker should i have to pay income tax on this
and if only i have this income and no other income from other source?
Raju
April 3, 2016 at 11:16 am
Dear Sir,
this is raju, I am playing bet365 sport betting and i deposited amount through neteller account and every month i am winning 3600 USD by playing different sports. in this connection, i have some doubts
1. is there any problems while money transfer to India bank account
2. what are problems will arise
3. How much tax i have to pay to India government with out any problems in future?
4. what is FEMA regulation
5. every month i have to with draw Rs. 2,34,000 (3600 USD) – how much tax i can pay
Meet
April 5, 2016 at 3:25 pm
Hello Sir,
I have a Neteller Account in INR. I use my Credit Card to deposit Rs. 10k in my Neteller account. The money that gets deducted from my bank account is also in INR. (<- here is the difference.)
Now, I deposit that money in Bet365.com which is also in INR, win a fortune (Rs. 2 crore) by betting on Cricket matches. So, I withdraw Rs. 2 Crore in my Neteller account in INR.
Now, I withdraw 2 core from Neteller to my bank account in INR.
So my questions are:
1.) In which scenario will I be subjected to FEMA regulations?
1.1) In case of no FEMA, can I just pay 30% tax = 60 lakhs and get to keep the rest 1.4 crores?
2.) If I declare this 2 Crore as Gambling winnings, what kind of criminal offence will it be?
2.1) Will I have to serve jail time or just a fine?
2.2) What would be the amount I would have to pay as a fine?
SATYA ROY
April 10, 2016 at 9:16 pm
Hi Jay,
Just a few questions I needed clarity upon. All questions in reference to Goa Casinos and if I manage to make money that is:
1. If I make more than 20 lac rupees will I be able to carry that back by flight within India or will I be subject to any legal or police harassment.
2. Is there any possibility of a casino transferring my winnings through online transfer for the said amount. If yes, will they charge me any tax on the amount.
3. In case the first option via flights is not possible and I somehow bring it back by bus will I be held by any authority and if yes will the authority take away my winnings legally.
4. In case all the options are not available and I somehow bring the cash back to my city of origin will I be able to deposit the entire sum into my savings account. If yes, would it be preferable that I make deposits in intervals wherein I deposit less than 10 lacs to evade IT harassment?
5. Is it possible for me to deposit the money in a non home branch bank in Goa?
6. If I must make cash deposits in my bank will I need any proof of my winnings. If yes, what proof should I have and what is the procedure to obtain it.
7. It has been mentioned that I shall be charged 30% tax on any winnings, is it on a certain above limit say above 10 lacs or in any case. Also what is the total amount of tax I have to pay inclusive of the 30% for me to finally be able to enjoy my earnings?
Anonymous
April 13, 2016 at 8:38 pm
Hi Jay,
Suppose I won a lottery jackpot or a higher amount of money in a the USA lottery, (and as per my knowledge USA government deducts 30% taxes on lottery prices for non residents.) in this case, will I also have to pay the tax to indian government?
Param
April 14, 2016 at 6:46 am
Hi Jay,
You are doing a great job in answering all these relevant questions. Appreciate that.
I am planning to start an online Slots and table games company and also planning to provide a mobile phone interface for that to the users. Can you please answer these questions ?
1. Can I register the company in any other state apart from Sikkim ? Is it even legal to set it up in Sikkim ?
2. Can you please advice on the procedure to obtain a license? What all steps are involved ? Any auditing etc..
3. I am leaning to get the company registered in Delhi. Is it possible by any chance ?
4. Any links or references are much appreciated.
Thanks a lot !!
Mohit
April 14, 2016 at 4:23 pm
Hi Jay
“As per Section 194B of the Income Tax Act, on any winnings above Rs. 10,000/- (as per laws prevailing in financial year 2012-13) it is the responsibility of persons organising or managing the event to deduct 30.90% tax before releasing the winnings.”
So if the organisers (in my case, an online poker site based in India) have not deducted TDS at the source an have let me withdraw money to my account, am I under any obligation to pay tax on such income? If yes, is this income legal or illegal?
Debu Hazarika
April 15, 2016 at 9:22 pm
Dear Jay,
Is it legal to play online lotto like us powerfully etc from India and if any winning available would that be legal?
Regards,
Debu. Guwahati. Assam
Sanjay
April 20, 2016 at 8:27 pm
Dear Sirs,
Though, the residents of Assam State are not to be allowed to play online games against money under as such as constitutionally Act.
My questions are:
if I play international online lotteries and become an winner as I am Indian citizen, will there be certain restrictions against me ? can I received the amounts of my winner?
So, please kindly give me wel advises.
Sanjay
April 20, 2016 at 8:38 pm
Dear Sirs,
Though, the residents of Assam State are not to be allowed to play online games against money under as such as constitutionally Act.
My questions are:
if I play international online lotteries and become an winner as I am Indian citizen, will there be certain restrictions against me ? can I received the amounts of my winner?
So, please kindly give me well advises. (my email- [email protected])
Balwant Singh
April 21, 2016 at 3:36 am
Hi Jay,
I am Balwant Singh..currently iam in DRC Africa.
I just wanted to know that what is the protocol to bring card game winning money from Africa to India.
Is there any documents require to show the custom in India.?
Bikram
April 28, 2016 at 4:00 pm
Hello Sir, can I deposit money in foreign bookmakers, Bet365, dafabet etc. whole transaction will be done in Indian currency using neteller ? Does it violate FEMA? Whether there will be any fine or punishment?
S Chauhan
May 4, 2016 at 7:35 pm
Dear Jay
I am looking for tax advises basically on Service Tax and Income Tax levied as per Indian Tax Structure on setup a company which will be into Raffle Draws/Lucky Draws. What I understood so far that TDS @ 30.90% is to be charged on the winning participant. We will either deduct from the individual or pay the same amount to the government.
Apart from TDS, which all other taxes (especially service tax) whether applicable on the company engaged into.
ANKIT
June 16, 2016 at 4:50 pm
SIR I HAVE WON IN POKER AROUND 500000 TDS HAS BEEN DEDUCTED. I DAILY PLAY POKER .ITS LIKE MY BUSINESS.CAN I TREAT IT UNDER PGBP ?
CAN I TAKE 80C DEDUCTION AGAINST MY WINNING?PLS ADVICE
Madhava
July 13, 2016 at 11:21 pm
I won in ace2three game(playing cards) 26000 they deducted 30% amount as tds and give money 20000 rupees to me..Iam elgible for applying for tds refund
Jay Sayta
July 14, 2016 at 11:47 am
No you cannot claim refund.
saunak
July 23, 2016 at 11:22 am
Hi jay,
I used to play fantacy cricket on dream11. I won many leagues of prizes worh RS 1000 or less. So no TDS is deducted by organizers. But by such winnings I accumulated more money (> 1000). I want to know how the total earnings is calculated. i.e Total money won – Total money lost or just total money won without considering what you lost. and Do i need to pay tax if yes then how much i have to pay? which form to fill?
saunak
July 23, 2016 at 11:25 am
* consider 10000 in place of 1000
Prashanth K
July 29, 2016 at 2:58 pm
Hi Jay,
I have won a Flat from bulider as part of Lucky draw which they have conducted on account of anniversary celebrations. Flat registartion value 31Lakhs. I am planning to do registartion next month. Want to know the following details.
1. How much tax(% of registration value) should i be paying for won flat?
2. By When should i pay it(during financial year/during the quarter i registered)
rajesh
August 10, 2016 at 4:58 pm
Hi jay,
I won 9000rs in fantasy cricket and my annual income is less than 2,00,000.Do i need to pay any tds or income tax on it ?
yogesh
August 19, 2016 at 11:54 am
we are residents of Pune.
my wife is a winner of a lucky draw contest organized by a leading news paper,the prize is a 1BHK flat.
the organizers are demanding from us to pay following charges besides TDS-
1.Electricity charges =75000Rs
2.infrastructure charges=25000
3.sundry charges =15676
4.legal charges =10000
along with registration ,vat stamp duty etc
My query is what money should be paid by and the organizers.
the organizers are the purchasers.
thanks
Sachin Malik
August 28, 2016 at 6:57 pm
If a person wins in a game of skill like reverse auction then does he have to pay any income tax on the winning product value ? example he spends Rs 2000 but he won a car worth Rs. 10 lakh in the reverse auction game then does he have to pay 30% tax on this winning product value or is it the responsibility of the company to deduct TDS ?
Himanshu
September 6, 2016 at 5:38 pm
Hi JaY
Good to see your apt and prompt replies. I have a simple query on which the law seems to be unclear about
for eg. if i pay 12000 to Mr A – i dedcut TDS on 12000 @30% = 3600
now next week only i pay Rs 8000 to Mr A then should i deduct TDS on Rs 8000 since the aggregate is more than Rs 10000 ??
Regards
himanshu
Jay Sayta
September 7, 2016 at 5:39 pm
Its not on aggregate amount, its per withdrawal so in this instance TDS may not be applicable.
Akash
September 13, 2016 at 7:56 pm
Hi
I have deposited some dollars in neteller . Com and from that the money is transfered into betonline . Com
After winning the money I transferred the amount in my neteller account and from that i can get it in my bank account
Here my question is, will it be legal to get online gambling money in my account?
I play roullet.
vivek kabra
September 14, 2016 at 6:09 pm
hi jay
i have won one million jackpot in us by playing online foreign lottery from india how should i received the amount in my bank account legally
Mahendran
September 14, 2016 at 10:16 pm
Hello sir,
I earned 2 lakhs through card game – ace2rummy.
They deducted 30% as tax.ie 60000 and remaining 140000 was in my account and i lost the whole amount in playing card again so for the current year i have paid tax of 40k but end of year i have amount of zero.
can i apply refund for 40000?
I have applied refund for 40000 and they have given the refund.so can i use the received 40000
Jay Sayta
September 15, 2016 at 12:05 pm
no refund or set-off is permitted.
Mahendran
September 14, 2016 at 10:19 pm
Mahendran September 14, 2016 at 10:16 pm
Your comment is awaiting moderation.
Hello sir,
I earned 2 lakhs through card game – ace2rummy.
They deducted 30% as tax.ie 60000 and remaining 140000 was in my account and i lost the whole amount in playing card again so for the current year i have paid tax of 60k but end of year i have amount of zero.
can i apply refund for 60000?
I have applied refund for 60000 and they have given the refund.so can i use the received 60000
Pritam
September 18, 2016 at 8:10 pm
Hi Jay, as per section 115BB, income tax have to be paid from earnings by gambling or betting. Do this section 115BB endorse betting or gambling as legal affairs?
Jay Sayta
September 18, 2016 at 9:18 pm
Income Tax Act does not differentiate between legal or illegal activities, both are taxed.
Pritam
September 18, 2016 at 11:52 pm
Thanks for replying. I am from Assam, this means that there is chance of getting entangled in legal problems if earnings are from gambling or betting.
srikanthmudiraj
September 28, 2016 at 1:49 pm
Hi Jay,
do we need to pay tax on amount withdrawn from Neteller ? does banks pass any of this transaction information to IT?
Amish Sheth
October 3, 2016 at 10:49 pm
I am distributor of hoseiry items.
Company has launched reward programme,in those distributor who do consecutive 4 months 100% purchase and 100 % sales as per target norms of company is eligible for computerised lucky draw.
In lucky draw I won car worth 12 lacs.
Company will either give me car or reimburse me the amount of car.
My question is prize money will be considered income under sec 2(24)(ix) and taxed under sec 115bb of income tax? Or can i claim it as business income since it is not pure luck but 4 consecutive months of physical and intellectual efforts too ?
Jay Sayta
October 8, 2016 at 11:54 am
It could be both- facts and circumstances as well as other evidences would have to be examined and the taxation authorities can also have their own interpretation. But since it is a contest or game it could fall under Section 115BB of the Income Tax Act.
v.p. dhawan
October 10, 2016 at 12:34 pm
dear jay sayta im senior citizen and i m not earning . if i win 2 crores from playwin jacpot then how much
money i will get after all deduction. is there any benefit on deduction if im staying on rental basis home and i will buy a home after winning . pls tell me. every thing in detail.
Rajesh
October 14, 2016 at 7:03 pm
Hi sir
What will be the taxes on foreign sport winnings from B365 and neteller and what to be mentioned if banks asks for source on those fund please help me out sir
Bhavesh
November 10, 2016 at 2:44 pm
Hi sir,
if any players Cash table winnings accumulated to 27K but no single session winnings are more than 10k as a company I have to deduct tax on 27 K or not. Secondly if we disburse the amount to player thrice 9K each is TDS applicable ?
Ismail
November 23, 2016 at 4:34 pm
Hi if I win 2 lakhs every month in horse racing. Wer should I pay tax of 30% … The site which I play is uk n they don’t detect tax … But I want to pay tax in India . Plz kindly help
Umamaheshwararao
November 29, 2016 at 6:48 pm
Dear Jay,
I play online casino and if I win, how to declare and where to pay tax? What will be the time to pay tax once the winning amount credited in to my account?
Sunil
December 1, 2016 at 2:54 pm
Dear Jay
This indeed is a very informative site. You have answered almost all questions connected with Gambling laws. However I have a question. I an a resident Indian and travel to UAE quite frequently. I almost always buy the millennium millionaire ticket. If I win this ticket, is it illegal to bring this money to India even if I pay income tax of 30.9%. Would there be penalty on this as well?
Santosh Jha
December 16, 2016 at 12:06 pm
Can a Authorised car distributor is responsible for TDS Deduction on Scratch Card given to customer by company
Jay Sayta
December 16, 2016 at 12:11 pm
Yes you have to deduct TDS
bablu
January 18, 2017 at 8:08 am
If we bet on cricket game is it legal if we pay tax or not
KARAN
January 23, 2017 at 10:35 pm
I have won more than Rs 1 Lakh on a site but its all accumulative like 2000 on one day, 3000 on one day.Never won more than 10000 on a single match/game . This amount is the accumulation of small small amounts on different days and matches but it is never more than 10000. So in this case TDS is also not provided to me since winning was not more than 10000.
Am i liable to pay tax on this? Do I need to declare it in income from other sources when filing the return?
Hunaid
February 22, 2017 at 8:58 am
Hi Jay,
Thank You for the informative post. But even after reading your post & various comments, some points remain unclear.
Many Indians have exactly similar query on here
1. Is it legal to withdraw winnings from foreign based betting sites Bfair/B365 to Indian Banks via Neteller if all taxes are duly paid?
2. I have earlier withdrawn money in the range of 20-25k at a time from my Neteller USD account to Indian bank in INR. Will this be a problem for higher amounts?
3. How does one show such income in IT Returns
To summarise my query is “Is it legal to bet online with foreign bookmakers and bringing back winnings and paying income tax on it?”
Thank You
Jay Sayta
February 22, 2017 at 10:59 am
It is not legal to bet on foreign bookmakers as the same is not permitted under FEMA Rules. However if you still do so, you will be liable to tax under the Income Tax Act and if detected also penalty under FEMA.
Viennay Tiwaarri
March 8, 2017 at 4:10 am
Hello, Mr. Jay
Pls answer this que.
What if i am playing a lottery online from Us or Uk or I Won big money.
Do i need to pay tax in both countries?
Even after Paying taxes, Can i be under illegal Act to get in jail.
Jay Sayta
March 8, 2017 at 11:58 am
There may not be jail but there could be a fine imposed for violating fema provisions
Tinku
March 13, 2017 at 5:21 pm
What about online international lottery, can it be played in chhattisgarh.
surender
March 16, 2017 at 10:11 pm
Hi all ,
Can I Get My TDS refund on winning lottery by filling ITR.
Jay Sayta
March 17, 2017 at 10:34 am
No
Pravin mane
March 29, 2017 at 9:47 pm
Hi Jay, I won 27000 on a gaming site over a period of time. If I withdraw 9000 three times, not at once. Will TDS be deducted?
Jay Sayta
March 31, 2017 at 10:00 pm
Depends on each website’s policy
S123
April 13, 2017 at 10:36 am
On online poker site adda52 suppose on a table I win 12000 RS in one game . When I come out of table and convert my chips to money 4000 TDS is cut but rest money is still on the online site account . So if I lose rest 8000 in next game, will I be eligible for TDS refund because I effectively received 0 RS in my bank account but paid 4000 as tax
Suriya
April 15, 2017 at 11:30 am
Hi. if I convert INR to Bitcoin in India and send to UK online casinos and win money, then again convert my winnings to bitcoin and bring to India then convert to INR and declare to income tax department as poker winnings and pay tax,my question is now Will I be under FEMA act in this case or not? as I do not use Foreign exchange for transaction.(bitcoin is a global virtual currency which is not regulated by any country government)
Rajesh
April 15, 2017 at 8:38 pm
HI Jay,
I am palying rummy from last 4 months…total tds deducted in these 4 months is 2lakhs..but if i calculate for 4 months my deposits and withdrwals all together, i am into loss of 4lakhs. So now am i eligible for claiming the deducted 2lakhs amount. please let me know.
sidhant
May 13, 2017 at 1:25 pm
want to clear my point on winnings in fantasy cricket games.
if suppose in 2-3 games total winning is more than Rs 10000 and if someone withdraw 9000 in 1st week 5000 in 2nd week and 8000 in 3rd week what would be TDS applicable if it will be 30.9% on total amount please clarify sir.
Kiran Aggarwal
July 13, 2017 at 5:31 pm
Hi Jay,
If i earned poker income in previous year then can i deduct deposit from them?
loss from one poker account is set off against the income of another poker account?
If TDS deducted is more after adjustments than whether should I claim refund?
Sahil
July 31, 2017 at 6:45 pm
I have received 700000 (approx0 after deducting TDS from Dream11 fantasy cricket site. i also received TDS certificate from Dream11. So, my question is that whether i am liable to file Income Tax return although i have no other income except above. whether i will be punishable for non filling of Return of Income. I am a residential individual ( student age above 20). I have also no investment which is Deductible under section 80C like PPF, LIC etc. Please guide me.
Orizo
August 20, 2017 at 6:29 pm
Hi jay
I wanted to know if someone from india won an international lottery like powerball/megamillions in USA….he will be taxed upto may b more than 40% of the amount that has been won in USA..after that if he wants to bring the money to india..will the amount remitted be again taxed here in india?or will such an amount,not taxed becoz it will lead to double taxation.