Despite the Indian online poker regulation is still a bit cloudy even after the Supreme Court ruling that declared the poker games based on skill legal in the Country, the tax topic is instead pretty clear to follow and apply to avoid unpleasant surprises.

Is poker taxed in India?

Yes it is. Section 194B of the Income Tax act clearly states that winnings from games like poker, rummy, fantasy sports, etc are taxed by 30% + 0.9% (cess and surcharge), for a total of 30.9% of the amount won.

How does a player pay taxes in India?

Basically there are two ways to pay taxes on online gaming in India:

  1. TDS (tax deducted at source), which is the most easy way to pay the amount due and the way all the major online Indian website operate: under the TDS regime, winnings will be deducted by 30.9% before the amount arrives on your selected cashout method.
    E.g. A player deposits Rs 10,000 and use the whole amount to buy in into a major tournament. He wins Rs 110,000 and decides to cash the money out. He will receive the 10,000 he deposited in full and the 100,000 won less the 30.9% withholding tax. The final amount will then be calculate as follows: 10,000 + (100,000*0,691) = 79,100
  2. Income Tax Return: if for some reasons the poker rooms where you play don’t apply TDS on your winnings, by the end of the fiscal year you have to file all the winnings in the Tax Income Return and then pay the amount due, which still will be 30.9% of the total.

How can I know if TDS is applied?

Surely the best way to find it out is checking on the website of your Indian poker room or ask to the customer care. If they do, they will send you proof of the withheld applied on your winnings and remember to store it a in a safe place because – you know – when it comes to talk about taxes and tax guys, better be safe than sorry.

Are all the winnings taxed?

There is an allowance set by the law at Rs 10,000 won. If you do not win more than that amount, you will not have the cashout deducted by a TDS nor you are supposed to fill the Income Tax Returns.

That’s a great news for a poker enthusiasts who starts to build a bankroll from freerolls and other kinds of free bonuses, but let’s be honest: if paying a lot of taxes means winning a lot of money, then it will be definitely a great bargain!