The development of fantasy video games primarily based on cricket is skyrocketing. The business may very well be value $3.7 billion by 2024, in line with a report by the Federation of Indian Fantasy Sports (FIFS) and KPMG.
Courts rulings that fantasy sports activities are video games of abilities has prompted new gamers to hitch the business.
In the present season of the Indian Premier League (IPL), If you’re taking part in fantasy sports activities on apps resembling Dream11, My11Circle, Mobile Premier League (MPL), or Paytm First Games, your winnings are taxable.
Fantasy sports activities are video games the place gamers assemble digital groups primarily based on statistics of real-life gamers.
The particulars of taxation are coated underneath Section 115BB of the Income Tax Act. It mentions that winnings from lotteries, crossword puzzles, races, or card video games will probably be taxable. The winnings are thought of as ‘revenue from different sources’.
Players do not get any deduction for expenditure. When calculating the tax, it would not matter the amount of cash you paid to take part within the sport. The tax is on the quantity received.
Suppose you had participated in a fantasy sport by paying ₹1,000 and received ₹10,000. The tax will probably be on the profitable quantity ( ₹10,000). You can not deduct the ₹1,000 that paid to take part.
Also, in case you lose two video games and received one, you’ll nonetheless must pay the tax.
According to the Dream11 web site, A tax of 30% is deducted at supply when a consumer wins greater than ₹10,000. The remaining quantity (after tax deduction) will get credited to the Dream11 account as ‘winnings’. Users additionally get a TDS certificates if they’ve verified their PAN card.
The tax deduction at supply by the fantasy sports activities corporations will probably be mirrored in Form-26AS.
Dream11’s web site additionally states that the corporate excludes money bonus which it affords when calculating TDS.
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