Introduction
2020 has been a unique year for all of us. Most Indians sought to diversify their income, given that their regular income was impacted due to multiple lockdowns in the country. It is no surprise that there has been an incredible rise in the popularity of online gambling in India.
Even though the laws and regulations on betting in India are vague, it is possible for Indian players to bet legally and securely in India while making some good profits.
Whether it is betting on sports, political outcomes, weather, dice, teen patti or any kind of game that involves chance, you will find gamblers in India who would love to place a bet on it.
The provisions of income earned from online betting fall under section 115BB of the Income Tax Act. Winning amount received is taxed at a flat rate of 30% excluding cess. The net rate after cess amounts to 31.2%.
It is to be noted that none of the tax exemption benefits apply to this income. This means that you cannot claim tax benefits on aspects like house rental, leave travel allowance, home loans, etc. described under the various sections of the Income Tax Act. The benefit of basic tax exemption and income tax slab rate are also not applicable on this income.
If the prize money exceeds Rs. 10,000, then the winner will receive the prize money after a tax deduction at source (TDS). For instance, if your winnings on an online betting site amount to Rs. 20,000, you will receive Rs. 13, 760 as the pay-out entails a tax deduction of TDS at 31.2% under section 194B.
There are instances where in the winnings from an online betting are physical items – cars, gold, electronic gadgets, etc. In such cases the prize distributor Is liable to pay the tax before releasing the prize. Tax is paid as per the market value of the prize given. The prize distributor can choose to recover the tax amount from the winner or bear the burden of tax.
To bet legally and to keep tax worries at bay, ensure to disclose your exact income from online betting. You must report your income from online betting while filing your income tax returns (ITR).
The recent years have seen more and more betting sites that are opening up for Indian players. It is no surprise that a number of such sites indulge in fraudulent and illegal practices.
Before you start online betting, it is important that you join a trusted betting site. We recommend visiting MyBetting.in, which is an aggregator of all the best legal betting sites in India. They can help you get started betting online legally fast, and at zero cost.
In summary, income from online betting is taxable in India. With the technological advancements, online betting sites in India have made it possible for betters to bet legally and securely ensuring full compliance with the income tax laws.
