Tax on Online Gaming & Lottery Winnings: 30% Under 194BA/115BBJ
Last verified: June 2026, against the Income Tax Act provisions and CBDT rules cited below. Figures apply to FY 2025-26 (AY 2026-27). This is general information, not personal tax advice.
Won money on a fantasy-sports app, a rummy or poker platform, a TV game show or a lottery? That income is taxed at a flat 30% — with no deductions, no basic-exemption benefit, and no rebate. And the platform usually deducts TDS before you ever see the money. Here is how online-gaming and lottery winnings are taxed in India.
Online real-money gaming: Sections 115BBJ and 194BA
Since April 2023, winnings from online games have their own regime:
- Section 115BBJ taxes net winnings from online games at a flat 30% (plus 4% cess = 31.2%).
- Section 194BA requires the gaming platform to deduct TDS at 30% on net winnings — with no minimum threshold. Every rupee of net winnings is covered.
“Net winnings” are computed under Rule 133, broadly as: (amount withdrawn + closing balance) − (opening balance + your own deposits). This covers fantasy sports, rummy, poker, online quizzes with prizes, e-sports cash rewards and similar real-money apps.
Lotteries, game shows and betting: Sections 115BB and 194B
Winnings from lotteries, crossword puzzles, card games, TV game shows, horse racing and betting are taxed under Section 115BB at 30%, with TDS under Section 194B at 30% once winnings cross ₹10,000 (aggregated over the year from a payer). Winnings in kind (a car, gold) are also covered — the payer must ensure tax is paid on the market value.
What you cannot do
- No deductions under Chapter VI-A (80C, 80D, etc.) against these winnings.
- No benefit of the basic exemption limit — the 30% applies from the first rupee.
- No Section 87A rebate on this income.
- You cannot set off other losses against winnings.
You must still report it in your ITR
Even if TDS was deducted, you must declare the winnings in your return (usually ITR-2) under “Income from other sources” and reconcile the TDS against your AIS/26AS. Gaming income is increasingly tracked, and non-disclosure can trigger a notice.
Worked example (online gaming)
You deposit ₹20,000 over the year, withdraw ₹50,000, and end with a ₹10,000 balance. Net winnings = (50,000 + 10,000) − 20,000 = ₹40,000. Tax at 31.2% ≈ ₹12,480, which the platform deducts as TDS under 194BA.
Online money games are now banned
The Promotion and Regulation of Online Gaming Act, 2025 came fully into force on 1 May 2026. It bans online money games — skill or chance — along with their advertising and payment processing, while permitting e-sports and online social games. Major real-money platforms have shut their paid contests. A constitutional challenge is pending before the Supreme Court.
The 30% tax on online gaming winnings has not been withdrawn, so it still applies to any winnings you received before the ban and to taxable prizes from permitted competitions. Withdraw any remaining balance from a closed platform and report it in your ITR.
Lottery and game-show winnings: worked example
You win ₹5 lakh on a TV game show. The organiser deducts 30% TDS (₹1.5 lakh) and pays ₹3.5 lakh. Your tax is 30% + 4% cess = ₹1,56,000, so you owe another ₹6,000 when filing. No basic exemption, deduction or the ₹12 lakh rebate can be used against it.
What changes under the Income-tax Act, 2025
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. Returns for FY 2025-26 (AY 2026-27) are still filed under the old Act, old section numbers and old forms. From tax year 2026-27 onwards, section numbers and many form numbers change — for example, Form 16 becomes Form 130, Forms 15G/15H merge into Form 121, Form 26QB becomes part of Form 141 and Form 10E becomes Form 39. The underlying rules discussed here were largely carried over; only the references change.
FAQs
Is online gaming tax still relevant after the ban?
Yes, for winnings received before 1 May 2026 and for prizes from permitted e-sports or social-game competitions.
Is there a tax-free limit on online gaming winnings?
No. Section 194BA TDS applies with no threshold, and 115BBJ taxes net winnings at 30% from the first rupee.
Can I deduct the money I spent playing?
Your own deposits are accounted for in the “net winnings” formula, but you cannot claim Chapter VI-A deductions or set off other losses against winnings.
Do I report winnings if TDS was already deducted?
Yes. Declare the full winnings in your ITR and claim credit for the TDS.
What is the threshold for lottery/game-show TDS?
₹10,000 under Section 194B; above that the payer deducts 30% TDS.
