Report Income from Gaming Apps like Dream11 & Rummy to Avoid Tax Notices

Have you made any income from online real money gaming platforms like Dream11, Rummy, or others? It’s crucial to file your Income Tax Return (ITR) to report this income, or you might face tax notices and possible legal issues. Understanding the nuances of reporting income from these sources is vital for compliance and peace of mind.

Under current tax laws, it is mandatory to file an ITR if any taxes, such as Tax Deducted at Source (TDS) or Tax Collected at Source (TCS), exceed ₹25,000. This is particularly applicable to those earning through online real money gaming. Engage further to comprehend the critical tax obligations tied to such online earnings.

Essential ITR Filing Requirements for Gaming Income

Chartered Accountant (Dr.) Suresh Surana clarifies the tax obligations:

• Per Section 115BBJ of the Income-tax Act, 1961, income from online gaming is taxable at a flat 30% rate. No exemptions or deductions are permitted.
• Reporting these earnings in your ITR is essential, even if total earnings are under ₹2.5 lakh.
• Losses from gaming cannot be adjusted against other income streams and must be reported despite this limitation.

Also read: Chartered Accountants caution joint bank account holders about this critical issue with tax rules that can lead to tax notices

Rule 12BA and TDS Implications for Online Gaming

Sandeep Jhunjhunwala of Nangia Andersen LLP provides insights:

• Winnings are taxed at a flat 30% without any deductions under Section 115BBJ.
• Any associated losses are not transferable to other income and cannot be carried forward to offset future gains.
• Even small winnings require TDS compliance, and platforms are obliged to report these against the taxpayer’s PAN.
• Rule 12BA enforces ITR filing should aggregate TDS or TCS exceed ₹25,000.

Also read: Good news for salaried taxpayers: Limits for these two tax-free perquisites raised substantially in Finance Act, 2025

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Filing an ITR with Nominal Gaming Winnings

Tax experts, including Mohit Gupta of PNAM & Co LLP, stress the importance of ITR filing, even for minimal gaming income:

• Under Section 115BBJ, even minor winnings, such as Rs 10, become taxable, necessitating strict reporting under “Income from Other Sources.”
• Compliance through filing ensures that your tax obligations are accurately reflected, preventing any penalties.

What Could Happen if Gaming Winnings Are Not Reported?

According to Jhunjhunwala, non-compliance with ITR filing for gaming winnings could trigger legal actions under Section 276CC for willful neglect. However, prosecution is not automatic and depends on evidenced intention and seriousness of the omission.

Stay informed on taxation compliances for online gaming to secure your financial integrity. Additionally, consider consulting a tax professional for personalized advice.

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