New Delhi: With both houses of Parliament passing the Promotion and Regulation of Online Gaming Bill 2025, the government is moving to ban all forms of online money-based gaming in India. The bill, cleared on August 21 without debate in the Rajya Sabha, also seeks to promote eSports and social (non-money) gaming.
If you have earned or lost money through online gaming in FY25, you must disclose these details while filing your income tax return.
Tax Rules for Online Gaming Income
Any money earned from online gambling or gaming is taxed under the head "Income from Other Sources" as per the Income-tax Act. Two key provisions apply:
Section 115BBJ: Tax is charged on net winnings from online games at a flat rate of 30 percent.
Section 194BA: TDS is deducted on net winnings in a user’s gaming account at the end of the financial year.
This means you will pay 30 percent tax on your net earnings from gaming platforms. No deductions under Sections 80C to 80U or rebate under Section 87A are available on this income.
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Example
If you paid Rs 2,000 as an entry fee and won Rs 50,000:
Net winnings = Rs 48,000 (Rs 50,000 - Rs 2,000)
TDS at 30 percent = Rs 14,400
Final payout = Rs 35,600
Filing Income Tax Return for Gaming Income
Winnings from fantasy sports, e-sports, poker, or any online game are fully taxable and must be reported. For most individuals, ITR-2 is the applicable form, though ITR-3 may be required if you have business income.
Also Read:Govt Gives More Time For ITR Filing, But Return Processing Still Lags At Under 40%
While filing:
Report winnings under "Income from Other Sources."
Include gross winnings (not just the net payout).
Match TDS details with Form 26AS and report them in the Schedule TDS section.
Collect payout statements and TDS certificates from gaming platforms.
Losses from online gaming can be adjusted against your gaming income before filing.
