growth of fantasy games based on cricket is skyrocketing. The industry could be worth $3.7 billion by 2024, according to a report by the Federation of Indian Fantasy Sports (FIFS) and KPMG.

In the current season of the Indian Premier League (IPL), If you are playing fantasy sports on apps such as Dream11, Cricket Exchange, My11Circle, Mobile Premier League (MPL), or Paytm First Games, your winnings are taxable.

Tax on Online Gaming

Finance Bill 2023 has introduced Sections 194BA and 115BBJ to tax income that users earn by winning
on gaming platforms.

Section 115BBJ

As per Section 115BBJ, the amount of income tax calculated on net winnings from online games during the previous year will be charged at the rate of 30 per cent.

Section 194BA

Section 194BA deals with tax deduction at source (TDS) on net winnings from online games in the user’s account at the end of the financial year. Deloitte India Partner and Media and Entertainment sector leader Jehil Thakkar said that the introduction of Section 194BA means that the TDS on winnings will now be deducted even below Rs 10,000.

Net winnings from online games will be taxed from TDS

Both sections are effective from April 1, 2023. So from the financial year 2023-24, your net winning from Dream 11 or online rummy will be taxed 30 per cent. TDS will also be deducted under Section 194BA.

Let us understand

Suppose you have paid an entry fee of Rs 1,000 and won Rs 35,500. Then, the online gaming company would deduct TDS on Rs 34,500 (Rs 35,500 less than Rs 1,000). The tax of Rs 10,350 (Rs 34,500*30%) would be deposited to the government and the balance of Rs 24,150 would be credited to the individual account.

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