Online Betting Taxes: What Players Should Know

Let’s be honest—winning at online betting feels amazing. The thrill of nailing a cricket prediction or hitting a jackpot in Teen Patti is unmatched. But here’s the twist: the money you win isn’t fully yours… yet. If you’re betting online in India, Uncle Sam—or in our case, the Income Tax Department—wants a piece of that pie. So, before you start dreaming about spending your winnings, you need to understand how taxes work in the world of Indian online betting.

How Online Betting is Taxed in India

In India, any money you earn from gambling, lottery, or betting—whether it happens online or offline—is treated as taxable income under the category called “Income from Other Sources.” This classification is set out clearly in the Income Tax Act, 1961, specifically under Section 115BB. It doesn’t matter if you win just a few hundred rupees or hit a massive jackpot worth lakhs; the tax authorities consider all these earnings as taxable income. So, no matter how small or large your winnings are, you are legally required to pay tax on them.

The tax rate imposed on betting winnings is a flat 30 percent, which means there’s no sliding scale based on the amount you win. Unlike regular income, where you might get to subtract your expenses or losses, betting winnings do not offer any such relief. This means you can’t deduct the money you spent on entry fees, losses from previous bets, or any other related expenses. The government’s stance is simple: the amount you win is the amount that gets taxed, full stop.

For example, if you win ₹1,00,000 from an IPL cricket bet, the tax department expects you to pay ₹30,000 as tax on that winning alone. This tax is applied irrespective of whether you played multiple bets or just one. The law is strict on this point because it aims to capture all gambling-related income without allowing deductions that could reduce the taxable amount.

Because of this rigid tax structure, it’s crucial for players to understand that betting winnings are not “free money.” Winning a large amount comes with a serious tax obligation, and failing to declare these earnings or pay the appropriate tax can lead to legal complications. So, if you enjoy online betting, make sure to keep track of your winnings and be prepared to pay the 30% tax that comes along with it.

TDS – Tax Deducted at Source

When you win a single amount that exceeds ₹10,000 on most Indian-licensed betting platforms, the site is required to deduct Tax Deducted at Source (TDS) before paying you. This means you will receive the payout after the tax has been subtracted, not the full amount of your winnings.
If your winnings are below ₹10,000, the platform typically does not deduct TDS, so you receive the full amount directly.
For example, if you win ₹5,000, no TDS is deducted because the amount is below the threshold.
If your win is ₹10,500 or more, the platform will deduct 30% TDS on your winnings and pay you the remainder.
In the case of a ₹1,00,000 win, the platform deducts ₹30,000 as TDS and transfers ₹70,000 to you.
The TDS deducted by the platform is deposited with the government on your behalf, and you get a TDS certificate (Form 16B) that you can use when filing your income tax return.
Many Indian betting sites comply with this rule to avoid legal troubles and ensure transparency with tax authorities.
However, most foreign or offshore online betting platforms do not deduct TDS on winnings because they operate outside Indian jurisdiction.
If you win on international platforms, you will receive your entire winnings without any tax deduction.
Despite no TDS deduction by foreign sites, you are still legally required to declare these winnings in your income tax return and pay taxes accordingly.
Failure to report foreign winnings can lead to penalties, as the tax department has tools to track large cross-border money transfers.
It’s essential to keep accurate records of all your winnings from both Indian and international platforms to report your income correctly.
Paying TDS through the platform simplifies the process but does not absolve you from filing your income tax return if your total income exceeds exemption limits.
You can claim credit for TDS deducted by Indian platforms while filing your tax returns, reducing your overall tax liability.
For winnings on international platforms where no TDS was deducted, you must calculate and pay the tax on your own to avoid trouble with the tax authorities.
Always verify if the platform provides TDS certificates or proof of deduction to maintain clear records for tax purposes.

Declaring Betting Winnings in Income Tax Returns

Aspect	Details	ITR Form Section	Information to Report	Effect on Tax Calculation
Where to report winnings	Betting winnings are declared as income	Schedule OS (Income from Other Sources)	Gross amount of your betting winnings	Forms the taxable income base for betting earnings
Reporting TDS deducted	Any TDS deducted by the platform must be declared	Schedule OS & TDS Details	Amount of TDS deducted on your winnings	TDS amount is adjusted against your total tax liability
Declaring winnings without TDS	If no TDS was deducted (e.g., foreign sites)	Schedule OS	Full gross winnings amount	Tax calculated on entire amount; no prior tax credit
Filing requirement	Mandatory if total income exceeds exemption limit	ITR Form (varies by individual)	Betting winnings included in total income	Tax computed on total income including winnings
Tax adjustment on filing	Tax department adjusts TDS deducted to avoid double taxation	ITR Processing	Deducted TDS amount automatically adjusted	You pay balance tax or get refund based on total tax due

Do You Have to File ITR Just for Betting Winnings?

If your total income for the financial year, including your betting winnings, exceeds the basic exemption limit set by the Income Tax Department, then yes, you are required to file an Income Tax Return (ITR). This rule applies regardless of whether your income comes solely from betting or includes other sources like salary, business, or investments. The government expects you to disclose all your income and pay the appropriate tax, and filing an ITR is the legal way to do this.

The exemption limits vary depending on your age group. For individuals below 60 years of age, the basic exemption limit is ₹2.5 lakhs per year. For senior citizens aged between 60 and 80 years, the exemption limit increases to ₹3 lakhs. Those who are 80 years and older have a higher exemption limit of ₹5 lakhs. If your combined income, including betting winnings, exceeds these thresholds, filing an ITR becomes mandatory.

Even if tax has already been deducted at source (TDS) by the betting platform, this does not exempt you from the responsibility to file your return. TDS is only a part of your overall tax liability and filing the ITR ensures that the tax authorities can correctly assess whether you have paid the right amount or if you need to pay additional tax or receive a refund. The return acts as a formal declaration of your income and taxes paid.

Failing to file an ITR when required can result in penalties and legal complications. The tax department uses various methods to track unreported income, especially from large betting transactions. Therefore, to stay compliant and avoid trouble, it’s crucial to keep track of all your earnings, calculate your total income, and file your returns on time whenever your income crosses the exemption limits.

What If You Don’t Report It?

Ignoring your betting income attracts unwanted attention from the tax authorities who have sophisticated tools to monitor financial transactions.
Banks and payment platforms like UPI keep detailed records of your deposits and transfers, making it easier for tax officials to track unexplained cash inflows linked to betting winnings.
Hiding your betting income increases the risk of an income tax audit or scrutiny, where the authorities can demand proof of your income and transactions.
If you fail to report your betting earnings, you may be liable to pay interest on the unpaid tax amount, which accumulates from the date the tax was due until it is actually paid.
The government can impose hefty penalties, ranging from 50% to 200% of the tax amount that you have not paid due to non-reporting or underreporting of income.
Apart from financial penalties, persistent tax evasion may lead to legal prosecution, which could involve fines, court proceedings, and even imprisonment in serious cases.
The tax department may also seize your assets or freeze your bank accounts if they find evidence of tax evasion related to undisclosed betting winnings.
Non-compliance can damage your financial credibility and make it difficult for you to obtain loans, credit cards, or conduct large financial transactions in the future.
The fear of being caught and penalized should encourage bettors to maintain transparency and accurately report all their winnings to avoid these severe consequences.
Ultimately, staying honest and filing your taxes correctly protects you from long-term legal and financial troubles linked to tax evasion on betting income.

Can You Adjust Losses Against Winnings?

Aspect	Explanation	Tax Treatment	Example	Implication for Taxpayers
Setting off losses	Losses incurred from betting cannot be deducted or set off against winnings	Not allowed	Lost ₹5,000 on multiple bets but won ₹20,000 on one	Taxed on the full ₹20,000 without loss adjustment
Carrying forward losses	Losses from betting cannot be carried forward to subsequent years	Not permitted	Cannot reduce tax liability in future years by using past losses	Tax liability remains on full winnings every year
Tax calculation basis	Tax is calculated only on the gross amount of winnings	Flat 30% tax on total winnings	Even if total bets lost more than won, tax applies only to winning amount	No relief or deductions for losses in tax return
Legal provision reference	Income Tax Act Section 115BB specifically restricts loss adjustments	Explicitly disallows set-off or carry forward	Losses from gambling or betting not treated like business losses	Taxpayers must report gross winnings as taxable income
Impact on bettor behavior	Bettors cannot reduce tax burden by claiming losses	Encourages caution in betting activities	Betting losses have no impact on reducing tax payable	Requires accurate record-keeping of winnings only

Difference Between Skill and Chance Games

In India, the government and courts distinguish between games of skill and games of chance when it comes to legality and taxation. Skill-based games include activities like rummy, poker, and fantasy cricket, where players’ knowledge, strategy, and decision-making heavily influence the outcome. These games are mostly considered legal in many states because they are seen as contests of skill rather than pure luck. On the other hand, games like slots, roulette, and other casino-style betting are classified as games of chance, where outcomes depend primarily on luck or random number generators.

The legal status of these games varies across Indian states, but generally, skill-based games enjoy more legal acceptance. For example, rummy is widely recognized as a legal game in many regions, and fantasy cricket is considered a game of skill by some states. However, despite this distinction, all winnings from both types of games are subject to taxation under Indian law. Players must report their winnings and pay tax accordingly, whether the game is skill-based or chance-based.

From a taxation perspective, winnings from skill games are taxed at the same flat rate of 30% if they exceed ₹10,000, with no deductions allowed for losses. Similarly, gambling winnings from chance-based games like slots and roulette are also taxed at 30%. The difference lies not in the tax rate but in the legal framework that regulates these games. While skill games are often permitted and regulated, games of chance are more heavily restricted or banned in many states.

The courts have consistently ruled that games predominantly based on skill should not be treated as gambling. Nevertheless, this distinction does not exempt winnings from tax liability. Whether you win at a game of skill or a game of chance, the taxman considers your earnings taxable income. So, even if the law treats these games differently in terms of legality, when it comes to paying taxes, the rules apply equally to both categories of games.