Betting in India is an illegal activity, but no law is made to declare it as an unlawful activity. According to 2020 data, there is an estimate that there are more than 300 million online gamers in India, and the number is seeing a steady rise.
Ever thought about the taxation factor applicable in gambling?
Section 115B of the Income Tax Act, successfully winning from gambling activities is taxable at 30%. The law formed by IT does not consider a differentiation between income from fancy games and poker.
If the amount won by the gambler crosses rupees 10,000, then the winner will receive his prize money only after the deduction of TDS @31.2%. Tax is not required to be paid on the transaction entered but on the winning amount.
If winnings are in kind:
Suppose a person wins a car from gambling betting, then it must be for the distributor that the TDS is deducted on the vehicle’s market value before handing it over to the winner.
If a person wins partly in cash and kind:
If the gambler is given a prize in terms of money and style, then the total tax shall be calculated on the cash portion of the award and the market value of the award given in the category. If the amount received in cash is not sufficient to cover the total tax, then the distributor should pay the deficit amount.
What is the GST for online gambling?
In 2017, the central and state governments concluded imposing a 28% tax rate on all entertainment, including casinos, racecourses, and related services.
Are there any extra surcharges for gambling winnings?
In addition to the regular 30% tax on gambling, specific surcharges depend on the gambler’s income. Like if the prize money of the gambler exceeds rupees 50 lakh, then a 10% surcharge applies to the average tax rate.
Tax requirements for Professional Gamblers:
If gambling is a person’s actual occupation, the tax rate is charged on his income earned by gambling. The income and expense data must be recorded on Schedule C being an employed individual.
Countries that do not pay tax for gambling;
Following are the list of specific countries where gambling is legal, and therefore no tax is required to be paid by the gambler:
Austria
Australia
Belgium
Canada
Czech Republic
Denmark
Finland
Hungary
Germany
Malta
Luxembourg
Italy
Sweden
Romania
UK
List of countries that do not have to pay tax on online gambling:
The UK
Canada
Germany
Austria
Bulgaria
Australia
Denmark
Italy
Sweden
Malta
Belgium
Ireland
Conclusion:
The tax rate fluctuates from one country to another depending on the legal scenarios of the countries. Gambling is a game that is addictive and includes a considerable amount of dealing in money. One must be mentally ready that they might lose a significant amount, or even if they win, a certain amount will be deducted from their winnings, and such the total amount they get is less than the winning prize.
Photo: Pixabay (free)
