Is Money Won in Casino Taxable in India?

The gambling laws in India are complex, and the law regarding the taxation of casino winnings can also be confusing. Within the past 10 years, the online gambling industry has exploded onto the Indian market as many Indians gain access to affordable high-speed internet connections. 

The question regarding the legality of online casinos in India remains vague. However, global conglomerates like Bet365 have found legal loopholes where they can offer their online gambling services to Indians. 

To help you better understand what’s required from you regarding the money you win at casinos, our experts at Casinotopsonline did comprehensive research on Indian taxation laws.

Current Taxation Laws

All the winnings above 10,000 rupees acquired from playing at online casinos are considered part of your annual income, and it’s fully taxable according to Indian tax law. All winnings must be declared under your tax report’s ‘Income from other sources’ heading. 

Complete tax information and details are stipulated under section 115BB of India’s Income Tax Act. Section 115BB stipulates the income earned from betting at casinos, betting in sports, and other gambling activities. You will be taxed 30% on your earnings obtained through gambling (irrespective of your tax bracket). 

In addition, specific surcharges apply over and above the taxed amount. This is known as the cess amount, and it’s levied over and above the due income tax amount. The total net rate after levies adds to approximately 31.2%, which is also irrespective of your tax bracket. The levy (or cess) is set at 4% and is added to the due tax amount. 

The good news is that you don’t need to declare your winnings when you obtain winnings at regulated and legal gambling sites such as horse racing venues or sites, rummy sites, or legal land-based casinos, to name a few. The reason is that the taxable amount has already been automatically deducted from you before you withdraw your winnings (per the TDS policy). 

For instance, suppose you’ve won 30,000 rupees at an online rummy site. When you withdraw your winnings, you’ll only be able to withdraw 20,640 rupees. The tax of 31.2% is automatically deducted as per section 194B of the TDS (Tax deducted at Source) policy. 

However, online international casinos are not required to comply with Indian laws as they have no presence in the country. Players are paid their entire winnings on these sites, which makes them solely responsible for declaring their winnings to the government. 

Taxation On Large Winnings 

The tax law in India states that surcharges will apply to large winnings (equal to or above 500,000 rupees). This adds a surcharge of 10% over the standard taxation rate. This calculates to 33%, excluding the levy. The total tax payable after the levy has been added will be 34.32%. Winnings that exceed 10 million rupees (1 crore) will have an added surcharge of 15% over the standard tax rate. This adds up to 36.92%, which includes the addition of the cess rate. 

The Bottom Line 

It’s very important that you declare the winnings that you get from online casinos. If you require more information regarding your tax status, we highly recommend contacting a chartered accountant who can give you the best advice and guide you through the process.