Dream11, My11Circle
The Indian Premier League (IPL) has been stopped due to India-Pakistan tension. However, before this, many people have earned money through sports betting apps like Dream 11, Mai 11 Circle etc. However, very few people know the rules of income tax related to income from these sporting apps. If you also have won money by forming a team on Dream11 or My11Circle, then know how much tax you have to pay.
According to tax experts, money received from lottery, online gaming, online game betting etc. is considered a contingent income for income tax purposes. Under the Income Tax Act, 1961, accidental income refers to such income that is obtained on irregular, non-recurring basis. The characteristic of such income is its uncertain and non-recurring nature.
It is necessary to tell income in ITR form
The earnings from online gaming and sports betting are considered taxable under the Income Tax Act, 1961 under “Income from other sources”. Under Sections 56 (2) (IB) and Section 2 (24) (IX) of Income Tax, it has been clarified that this type of earnings will be placed in the category of income and it will have to be shown in the section of “income from other sources” in ITR form.
Income tax rate on earnings from online games
According to the Income Tax Act, flat 30% tax is levied on online gaming, sports betting and other casual income. This tax is charged under Section 115BB and Section 115BBJ. Section 115BB: Lottery, crosswords, horse racing, cards or other gambling/betting are applied. Section 115BBJ applies to earnings from online games. Apart from this, surcharge and 4% health and education cess are also added. TDS is applied to such rewards under Section 194B, 194BB and 194BA. Whatever amount is won from the online game, the flat 30% tax + surcharge and cess is levied on it, and TDS is also deducted at the same rate.
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