The Indian Gambler’s Tax Guide (2026): Navigating TDS, 28% GST, and ITR

India’s online gaming industry has undergone a dramatic transformation over the past 2 years. Once projected to reach $5-6 billion by 2025, the gaming sector experienced explosive growth driven by affordable smartphones, rising internet penetration, and a young, tech-savvy population.

But 2023 changed everything. The government introduced sweeping tax reforms, bringing online gaming, betting, and gambling into a unified and tightly monitored tax structure. As of FY 2025–26, before the Promotion and Regulation of Online Gaming Act, 2025, whether you are playing fantasy cricket on Dream11, rummy on Junglee Rummy, quizzes on Winzo, or contests on MPL, the taxation principles are the same.

Now reinforced by the Promotion and Regulation of Online Gaming Act, 2025, the regulatory landscape has fundamentally shifted these platforms and has banned in India these platforms are shut down, and a few are offering a free-to-play model, which means the only option of offshore gambling sites.

The Regulatory Shift

In FY 2025–26, the Indian government treats all online money gaming activities, whether fantasy sports, poker-style formats, casino-type games, or betting structures under a unified tax and regulatory umbrella. Two parallel systems now operate, one is 28% GST on the full face value of deposits and another is 30% TDS on net winnings under Section 194BA.

Skill vs Chance: Tax Law No Longer Cares

Historically, courts distinguished between games of skill and games of chance. However, for GST purposes, both are taxed equally at 28% and for TDS purposes, both attract 30% on net winnings. In short, if you deposit money on a digital platform expecting monetary gain, the same tax rules apply.

1. Upfront Costs: The 28% GST on Deposits

One of the biggest structural changes came when GST shifted from 18% on Gross Gaming Revenue (GGR) to 28% on the full face value of bets. But now platforms are banned, no one offering deposition for playing except offshore so this 28% GST has completely gone now.

So, 28% GST is dormant in practice, not repealed in law.

2. Taxation on Profits: The 30% TDS (Section 194BA)

This is where most confusion arises. GST applies when you deposit money and Income tax applies when you win money.

Even after the platform ban, income tax remains fully enforceable. Under Section 194BA, the earlier ₹10,000 TDS threshold has been removed entirely. A flat 30% tax applies on every rupee of net winnings, with no minimum exemption. This rule applies to all resident players.

How Net Winnings Are Calculated?

To ensure only actual profit is taxed, the CBDT clarified the calculation under Rule 133. Net winnings are determined by subtracting a player’s deposits and opening balance from total withdrawals during the year. This ensures that only profit is taxed, not the capital originally deposited.

When TDS Applies?

Earlier, Indian platforms deducted tax at the time of withdrawal, or on the balance remaining on March 31, whichever occurred earlier

After the ban, Indian platforms no longer deduct TDS. Offshore platforms also do not deduct Indian tax. This does not remove the tax liability. It shifts responsibility entirely to the player.

For example If a player deposits ₹20,000 and later withdraws ₹50,000, net winnings equal ₹30,000. Tax at 30% comes to ₹9,000, leaving ₹41,000 as post-tax income. When this occurred on Indian platforms, TDS appeared in Form 16A and Form 26AS. When it occurs on offshore platforms, the player must calculate and pay this tax while filing their return.

In short, GST on deposits has disappeared in practice, but TDS on net winnings continues regardless of platform location.

3. Filing Your ITR: Section 115BBJ

TDS is only a collection mechanism. The final responsibility lies with filing your Income Tax Return correctly. All gaming winnings must be reported under “Income from Other Sources” and taxed under Section 115BBJ at a flat 30% rate. In most cases, players are required to file ITR-2.

A crucial point many players overlook is that this income comes with no reliefs. You cannot claim rebate under Section 87A. You cannot claim deductions under Sections 80C to 80U. Most importantly, you cannot set off losses across platforms. Losing money on one site does not reduce your tax liability on winnings from another.

Even if your total income is below the basic exemption limit, you are still required to file an ITR if you have gaming winnings. Failure to do so can lead to loss of refund eligibility, penalties, and scrutiny for under-reporting.

5. The “Offshore” Trap: Legal & Tax Risks

The 2025 law makes it clear that many online money gaming services operate from offshore jurisdictions, often bypassing Indian regulations and enforcement mechanisms. While such platforms may remain accessible, using them creates a dual risk.

From a tax perspective, winnings remain taxable in India even if no GST or TDS is deducted. From a legal perspective, the law frames online money gaming as a matter of public health, financial integrity, and national security, and grants authorities wide powers of investigation, blocking, and enforcement.

In other words, offshore access does not automatically provide safety. Playing on blacklisted offshore sites only adds opacity, and that lack of transparency increases risk. However, if players choose our recommended offshore online casino platforms that are well-established and carefully vetted, the level of operational safety can be comparatively higher.

6. Practical Checklist for the Financial Year-End

For the financial year 2026–27, anyone with gaming winnings must take personal responsibility. Maintaining a clear record of deposits, withdrawals, and opening balances is essential. Since no platform may issue tax certificates, players must rely on their own records to calculate net winnings accurately.

Declaring income honestly, filing returns on time, and paying applicable tax is no longer just a compliance exercise, it is a protective step against future disputes.

Conclusion

India’s online gaming ecosystem has shifted from rapid growth to strict control. While GST on deposits has become inactive due to the platform ban, income tax on winnings under Sections 194BA and 115BBJ remains fully enforceable.

Understanding GST on deposits, TDS on net winnings, and how to report betting income in ITR is now essential for anyone engaging with online gambling in India in 2026.

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