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  • Writer's pictureShreyanth Nalam

Won cash from online fantasy contests? Know your tax liability

With the IPL fever peaking in the country amongst a slew of advertisements from online fantasy games such as Dream 11, MPL and online rummy organizers tempting viewers to test their sporting skills and if lady luck is kind enough viewers are bestowed with some large winnings. So, what next? In this blog post, we look into the tax implications of winnings from fantasy games, online cards contests and other games involving a cash element in the winnings.

As per Section 115BB of the Income Tax Act, 1961, 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 are taxable at a flat rate of 30% of the said winnings under the head "Income from Other Sources". This has to be declared in the respective ITRs appropriately.

Further, the organizers are required to deduct tax at source at a rate of 30% under Section 194B of the Income Tax Act, 1961, if the winnings exceed INR 10,000. In such cases, the assessee's (winners) are required to match the TDS credit available in their Form 26AS/Form 16A against the winnings in their respective ITRs against each entry.

Pertinently, if the taxable income is below the basic exemption limit or is under INR 500,000, then the assessees can claim rebate under Section 87A of the Income Tax Act, 1961 thereby may claim the refund of the TDS so deducted at the time of filing the ITRs.

So, the next time you win cash in online fantasy games, remember that the entire winnings may not be always yours to enjoy!

Disclaimer - It is to be noted that all reasonable care has been taken by the author to avoid errors. The author accepts no responsibility for any error crept in any manner and shall not bear any kinds of losses/damages incurred by a reader on account of such errors. This article should be treated only for informational and knowledge gain purposes only. The author shall not accept any responsibility for any loss occurred by anyone on acting on this article.

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