Live Casino India Tax Laws Explained

Priya Khan - 23-06-2021

Live Casino India Tax Laws ExplainedOnline gambling has become largely popular in India over the last 10 years and players are now able to win significant sums of playing the live casino India and other games online. Sports betting India activities have also skyrocketed in recent years. According to studies conducted, 40% of the Indian population engages in some form of gambling.

Due to the high rate of gambling within the country, the online gambling industry generates good revenue for the government in the form of taxes. Any online gambling winnings are fully taxable in India.

Tax And Your Casino Winnings

The current situation is that Indian gaming regulations in only a few states provide for land-based casinos. Live casino India activities and all other online gambling income falls under the heading “income from other sources”, which is found on the annual tax report. The details regarding the tax extracted on this particular income can be found under section 115BB of the Income Tax Act.

All online casino and sports betting India income is taxable, and players should act in compliance with the income tax laws. While some online operators tax payouts at the source there are those that allow for full amount withdrawals. These platforms essentially place the responsibility of declaring the tax and winnings directly in the hands of the players.

Tax Calculation Guide

Live casino India and other game and sports betting wins are taxed at a 30% flat rate which excludes cess. Furthermore, excluding the benefit of exemptions, the net rate after cess is 31.2%. Cess is set to 4% and is added to the due tax payable by persons whose income is liable for income tax. The term cess refers to a surcharge for education and health that is imposed by the government.

In addition to the aforementioned tax, there are additional surcharges depending on the income group of the person. If gambling or sports betting India winnings are greater than Rs.50 Lakh, a surcharge of 10% is necessary over the regular rate. Moreover, the surcharge in 5% on the standard rate of 30% excluding cess, if the winnings are more than Rs.1 Crore. Following the addition on cess, the cumulative tax rate amounts to 35.92%.

However, it is worthy of mentioning that most casinos do not allow players to put such exorbitant amounts of money at stake for the interest of player safety. To ensure that you are betting legally and preventing any tax complications, it is further necessary to disclose the exact income you have made through the online casino when filling in your annual tax report.

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