New Delhi: With the Rajya Sabha passing the Promotion and Regulation of Online Gaming Bill 2025, the landscape of online gaming in India is undergoing a major shift. The new law imposes a complete ban on all money-based online games such as fantasy sports, poker, and rummy while allowing only eSports and social gaming. Those who break the law could face up to three years in prison or a fine of up to Rs 1 crore.
However, even as this ban comes into effect, it’s important to remember that any income or losses from such games during FY25 still need to be reported while filing your income tax returns. Are you prepared? ()
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In a circular issued on May 22, 2023, the Central Board of Direct Taxes (CBDT) clarified how Tax Deducted at Source (TDS) applies to online gaming winnings. According to the guidelines, online gaming platforms must deduct 30 per cent TDS on any earnings users make from winning games. This rule falls under Sections 115BBJ and 194BA of the Income Tax Act, which are specifically designed to tax profits made through online gaming platforms. ()
If you’ve earned money from online gaming during the financial year 2024–2025, you’ll need to report it under “Income from Other Sources” while filing your income tax return.
Under the Income Tax Act:
– Section 115BBJ states that net winnings from online games will be taxed at a flat rate of 30 per cent, regardless of your income slab.
– Section 194BA requires the platform (the one paying you) to deduct TDS at 30 per cent on your net winnings—either when you withdraw your earnings or at the end of the financial year, whichever comes first.
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