Playing Teen Patti at the Diwali festival is quite common in countries like India. However, the introduction of online gambling platforms changed the whole scenario of these games. You should know the guidelines of gambling and how taxation works.
American jackpots are now available in India at Lottoland, enhancing the online lottery winnings. Continue reading to understand how the lottery winnings are taxed and about the legality of online gambling.
Scenario Of Online Gambling In India
Firstly, the Indian casinos are restricted from promoting any online gambling sites except for one state that is Sikkim. It has an online lottery that allows lottery lovers nationwide to play it online. The legality, tax, rules, etc., everything is decided and controlled by India’s laws.
Gambling is not illegal in India, as many international gambling sites are already creating a strong audience base. International sites are legally allowed to promote their place, but they have to deal with Indian rupees. Many sites are becoming popular day by day, and many Indians are already participating in multi-millionaire lotteries.
How tax applies to any lottery winning?
According to the Income Tax act of 1961, the tax applies to winning above 10,000 earned from online casinos. Section 115B states that the money earned from gambling, crossword puzzles, or any other game will get deducted with a uniform rate of 30%. While filling the income tax statement, lottery money will fall under the heading “Other Source Incomes.”
Suppose your annual income is below Rs. 5 Lacs. You won’t have to deal with the income tax as it depends on the tax structure. However, if you win prize money from the online casinos, you will only receive 70% of the amount, and the rest will eliminate.
You have to go through the guidelines and regulations of the online lottery platforms. It is essential to know how the online platform pays the tax. Sometimes these platforms deduct the taxes, or the player has to pay the tax himself.
Are resources better than the cash prize?
You will find many online gambling sites offering resources instead of cash prizes. You also have to pay the tax for the car, tablet, or laptop you win in the game. Suppose you win a car of around 5 Lacs (market value). Now, you have to pay a tax of approximately 1.5 lacs at 30% GST.
In case you get cash prize and resources from the online site. You have to pay 30% of the total amount instead of paying separately for both of them.
How is online gambling so popular?
- Risk is the driving factor in many lottery winnings. Even if people know the chances of losing are higher, they tend to play it in the hope of winning someday. Online casino businesses are flourishing because of this thrill of winning and losing.
- Online sites don’t have any distractions as you are playing online on your devices with your own comfort. Online lotteries allow you to sit back and concentrate on your game without any interruption.
- The convenience is undeniable as all you have todo is visit a website and start playing. The availability of the internet makes it much simpler to play online and earn money. The best part about online games is that it is secured, and you can entirely rely on online transactions. Just turn on the computer, have an internet connection, and be ready to enter the online lottery world.
- There are so many options for players that you can never get bored of. You will find different kinds of games and choose the one that looks interesting. These games’ versatility makes it a better platform for players to stick around for a longer time.
- Earlier, people were skeptical of the safety of these online platforms. However, many sites fall under the state, making them the most secure online platform for gambling.
Avoid Evading Taxes
If you are into online gambling sites, evading the taxes can get you and your money into more significant troubles. However, there is a way you can get rid of the obligation of paying 30% of your winning prize.
If the player wins sweepstake at any lottery platform, the money is credited to the player’s lottery account. So, to get the prize money, you have to take out the money from the account. Here you can use your brain and withdraw cash in portions. Try no to take out an amount that exceeds 10,000 and save your winning amount from getting taxed.
However, it is essential as a responsible citizen to display your winning prize. You should disclose the cash prize on which the TDS is deducted according to the income tax laws.
The gambling site users in India are increasing day by day in millions. It is also a massive advantage for the Indian economy. Thus, by knowing about the tax laws and payments, you can ease up your gambling experience.