Oct 1 | Tax on online gaming & casinos set to 28%

[pawanjain]

Starting October 1 which is today, new GST rates are applied on earnings from online gaming, casino sites and horse racing.
Earlier, tax was applied on net winnings from online gaming only if the winning amount was more than 10,000.
But then later it was announced that TDS of 30% would be applied on all online gaming winnings.
Now they have decided that it would be 28% GST on online gaming winnings which is a relief of 2% from previous tax rates.
I had also made a post about it earlier 30% TDS on online gaming

But the question is that tax rate for crypto earnings is still 30%. So the earnings from crypto gambling sites would be taxed at 30% or 28% ?
I personally think it would be 30% since crypto is involved and the government wouldn't leave a place where more tax can be collected.

Source: Online gaming: 28% GST comes into effect from October 1, CBIC makes announcement

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[pakhitheboss]

But the question is that tax rate for crypto earnings is still 30%. So the earnings from crypto gambling sites would be taxed at 30% or 28% ?
I personally think it would be 30% since crypto is involved and the government wouldn't leave a place where more tax can be collected.

Source: Online gaming: 28% GST comes into effect from October 1, CBIC makes announcement

Assuming we go through the legal way, as in you use a crypto casino to play and earn some profits then transfer the winning amount to an Indian exchange. You then convert your winning to INR. The taxable amount after the TDS deduction would be nil as it does not fall under capital gain if you did the conversion on the same day. You won't be paying 30 percent tax as per your earnings as it does not show you made a profit. The government cannot go after International crypto casinos that are based on a foreign soli regardless of you being a verified KYC user.

The law only applies to those individuals who are using local casinos with fiat money. This is not quantum computing or something out of logic to understand. This is a simple loophole in which the Indian government cannot do anything. Unless they come up with a law that forces a user to verify their personal wallet. Why I talked about the personal wallet is for you to understand.

[Stedsm]

Is it only on the winnings?
One of my friends earlier told me that they rolled out something like we will be taxed even on our deposits no matter if we win anything or not, he said that this is to reduce the use of apps like Dream11 and all. Btw, I'd also like to mention that they got a notice of ₹25,000 crores for tax evasion and are 1 of the 12 companies to whom the notices were sent, totalling it over ₹55,000 crores.

If things will go this way, no wonder people will do their best to fly away from the country thinking that everything is being tightened up just to let the poor remain poor or become poorer, and the riches become richer as hell. 

[pawanjain]

But the question is that tax rate for crypto earnings is still 30%. So the earnings from crypto gambling sites would be taxed at 30% or 28% ?
I personally think it would be 30% since crypto is involved and the government wouldn't leave a place where more tax can be collected.

Source: Online gaming: 28% GST comes into effect from October 1, CBIC makes announcement

Assuming we go through the legal way, as in you use a crypto casino to play and earn some profits then transfer the winning amount to an Indian exchange. You then convert your winning to INR. The taxable amount after the TDS deduction would be nil as it does not fall under capital gain if you did the conversion on the same day. You won't be paying 30 percent tax as per your earnings as it does not show you made a profit. The government cannot go after International crypto casinos that are based on a foreign soli regardless of you being a verified KYC user.

Unless you buy crypto, gamble it, take the profits and exchange it to fiat again on the same day, it's not as simple as it sounds.
The tax calculation will be complicated when crypto is involved and more complicated when gambling is making losses to us.

The law only applies to those individuals who are using local casinos with fiat money. This is not quantum computing or something out of logic to understand. This is a simple loophole in which the Indian government cannot do anything. Unless they come up with a law that forces a user to verify their personal wallet. Why I talked about the personal wallet is for you to understand.

Is it mentioned anywhere that the law does not apply to crypto casino sites ?

Is it only on the winnings?
One of my friends earlier told me that they rolled out something like we will be taxed even on our deposits no matter if we win anything or not, he said that this is to reduce the use of apps like Dream11 and all. Btw, I'd also like to mention that they got a notice of ₹25,000 crores for tax evasion and are 1 of the 12 companies to whom the notices were sent, totalling it over ₹55,000 crores.

If things will go this way, no wonder people will do their best to fly away from the country thinking that everything is being tightened up just to let the poor remain poor or become poorer, and the riches become richer as hell. 

As per the previous rule, TDS was applied on winnings from gaming and so I assume that the new law would be on winnings too.
Yet, I am not sure and so I cannot guarantee the same and further clarity is required for the new law.

[Bitcoin Smith]

Is it mentioned anywhere that the law does not apply to crypto casino sites ?

Ironically, gambling itself is not legal in most of the states in India and these dream 11, Rummy and other such apps promotes themselves as skill based games.

AFAIK, casinos are not reporting the userbase data with government like exchanges do, so for crypto there will be no tax deduction at all for now but when you are trying to convert the winnings from crypto casinos to fiat then you are obviously has to pay 30%.

Is it only on the winnings?
One of my friends earlier told me that they rolled out something like we will be taxed even on our deposits no matter if we win anything or not, he said that this is to reduce the use of apps like Dream11 and all. Btw, I'd also like to mention that they got a notice of ₹25,000 crores for tax evasion and are 1 of the 12 companies to whom the notices were sent, totalling it over ₹55,000 crores.

If things will go this way, no wonder people will do their best to fly away from the country thinking that everything is being tightened up just to let the poor remain poor or become poorer, and the riches become richer as hell. 

As per the previous rule, TDS was applied on winnings from gaming and so I assume that the new law would be on winnings too.
Yet, I am not sure and so I cannot guarantee the same and further clarity is required for the new law.

The tax applied only for the winnings amount.

for example, if someone bet 1000 INR and won 15,000 INR

taxable amount = (Winnings - bet amount) = (15000 - 1000) = 14,000

So the tax deduction will be for that 14,000.

And about the notice sent to the companies are not tax evasions, its what their tax due which has to be paid since they started operation not since the rule applied which is why those huge amounts has to be paid.

[TheUltraElite]

The 30% TDS is applicable, but since the casinos dont operate like that (on Indian soil) I guess that is waived off for now. But for exchanges that are running here, its pretty damn applicable.

Now coming to gaming sites and that 28% tax, its like the capital gain from the games, like @Bitcoin Smith said.

The confusion here would be if casinos running outside would have to undergo KYC document submission to the Indian government and the gov then tracks down how many of us are winning money there.

Then the decision of 28% or 30% would come in, obviously this would not happen anytime soon.

[pakhitheboss]

The confusion here would be if casinos running outside would have to undergo KYC document submission to the Indian government and the gov then tracks down how many of us are winning money there.

Then the decision of 28% or 30% would come in, obviously this would not happen anytime soon.

Again most casinos are not based in India as gambling is illegal as per the law. These casinos are always located in locations that are tax heaven, it is not that easy for the government to get user data from them. Crypto Casino user data is harder to get hold of as they do not force every user to pass KYC, plus they are mostly anonymous. So it is out of the question for the Indian government to track those users using these casinos.

If they do use Indian exchanges to convert their winnings to INR it won't fall under the 30% TAX slab as there is no way the government would know it is a capital gain. They would only see it coming from an online wallet to the exchange wallet on the same day. If the price of cryptocurrency that is being transferred on the same day does not change capital gain is not applicable. 

[TheUltraElite]

Again most casinos are not based in India as gambling is illegal as per the law.

Which is why Deltin operates its casino in Goa on the water. They are very crafty because they used the loophole in the legal document where it says "no land-based casinos" - hell we will operate in water

So it is out of the question for the Indian government to track those users using these casinos.

True, more waste of money for the government, dont think they will afford it. More money should go into election campaigns.

If they do use Indian exchanges to convert their winnings to INR it won't fall under the 30% TAX slab as there is no way the government would know it is a capital gain. They would only see it coming from an online wallet to the exchange wallet on the same day. If the price of cryptocurrency that is being transferred on the same day does not change capital gain is not applicable. 

A lot of factors to consider here. And I dont think the people gambling from India need to get concerned about the same. Further clarity should be awaited.

[Stedsm]

Again most casinos are not based in India as gambling is illegal as per the law.

Which is why Deltin operates its casino in Goa on the water. They are very crafty because they used the loophole in the legal document where it says "no land-based casinos" - hell we will operate in water

--snip--

The issue is, the casinos are not allowed here in our country (not even sportsbetting as far as I know) and only this fantasy thing that needs skills is currently running at a very big pace. Even games like rummy, teen patti and other such games where people can actually decide to continue their bets ahead or just fold and wait for the next games, are kind of games which are almost the same as we see on international casinos but I don't understand how our government has not yet banned those games.

[pawanjain]

Again most casinos are not based in India as gambling is illegal as per the law.

Which is why Deltin operates its casino in Goa on the water. They are very crafty because they used the loophole in the legal document where it says "no land-based casinos" - hell we will operate in water

--snip--

The issue is, the casinos are not allowed here in our country (not even sportsbetting as far as I know) and only this fantasy thing that needs skills is currently running at a very big pace. Even games like rummy, teen patti and other such games where people can actually decide to continue their bets ahead or just fold and wait for the next games, are kind of games which are almost the same as we see on international casinos but I don't understand how our government has not yet banned those games.

According to what I have read, casinos are still operated in India because different states have different rules for them.
The government has given the authority to respective states to decide their rules for casinos.
This is why goa has casinos which are not operated on land but on ships on water 😂

[LucyFurr]

Again most casinos are not based in India as gambling is illegal as per the law.

Which is why Deltin operates its casino in Goa on the water. They are very crafty because they used the loophole in the legal document where it says "no land-based casinos" - hell we will operate in water

--snip--

The issue is, the casinos are not allowed here in our country (not even sportsbetting as far as I know) and only this fantasy thing that needs skills is currently running at a very big pace. Even games like rummy, teen patti and other such games where people can actually decide to continue their bets ahead or just fold and wait for the next games, are kind of games which are almost the same as we see on international casinos but I don't understand how our government has not yet banned those games.

It is because they promote themselves as skill based games where you can make money, it's literally gambling though but when we have money the rules can be manipulated.

Few state governments banned dream11 and similar apps and others have some restrictions so it differs from one state to another and the regulations related to internet activities are not strong in our country that is why these apps are still making money.

[TheUltraElite]

Few state governments banned dream11 and similar apps and others have some restrictions so it differs from one state to another and the regulations related to internet activities are not strong in our country that is why these apps are still making money.

The government can keep banning them and more such avenues to circumvent the official ban on gambling will come up and be made popular among the youth of India. If you feel they are bad, advice those who are addicted to it to quit using them, help them but dont force them, because it is an addiction after all.

Such cat and mouse games between the government and different app makers always exist, you just have to watch them have fun.

[LucyFurr]

Few state governments banned dream11 and similar apps and others have some restrictions so it differs from one state to another and the regulations related to internet activities are not strong in our country that is why these apps are still making money.

The government can keep banning them and more such avenues to circumvent the official ban on gambling will come up and be made popular among the youth of India. If you feel they are bad, advice those who are addicted to it to quit using them, help them but dont force them, because it is an addiction after all.

Such cat and mouse games between the government and different app makers always exist, you just have to watch them have fun.

I see this thing differently, most of the users of these fantasy sports are youngsters who may not be aware of what it actually it is so it is important for the company to brand them in the right way but they are promoting themselves as some kind of skill game which makes crores of people to bet on these apps every day, especially at IPL and World cup matches and all of them were bring into the concept of fantasy sport by deceiving.

Advice is to create awareness and also regulate the fantasy sports under gambling which will make them more regulated and help the minors to stay away from gambling because mostly these people come from the middle class.

[pawanjain]

Few state governments banned dream11 and similar apps and others have some restrictions so it differs from one state to another and the regulations related to internet activities are not strong in our country that is why these apps are still making money.

The government can keep banning them and more such avenues to circumvent the official ban on gambling will come up and be made popular among the youth of India. If you feel they are bad, advice those who are addicted to it to quit using them, help them but dont force them, because it is an addiction after all.

Such cat and mouse games between the government and different app makers always exist, you just have to watch them have fun.

I see this thing differently, most of the users of these fantasy sports are youngsters who may not be aware of what it actually it is so it is important for the company to brand them in the right way but they are promoting themselves as some kind of skill game which makes crores of people to bet on these apps every day, especially at IPL and World cup matches and all of them were bring into the concept of fantasy sport by deceiving.

Advice is to create awareness and also regulate the fantasy sports under gambling which will make them more regulated and help the minors to stay away from gambling because mostly these people come from the middle class.

You are right. Even I don't like the way these apps promote their platforms. They show as if people can earn easy money using their platform.
But the hidden truth is that people actually get attracted towards gambling using such platforms.
The major problem is that these ads are also displayed on TVs where even the kids watch it and get attracted to it.
Government should ban such ads to be displayed on TVs.

[TheUltraElite]

The major problem is that these ads are also displayed on TVs where even the kids watch it and get attracted to it.
Government should ban such ads to be displayed on TVs.

Advertisements of Condoms with sultry scenes done by famous actresses are also there, these are usually the gulity pleasures of many kids and were once ours too when internet access was not so common. Same with gambling based ads, in my opinion.

What is needed is awareness to be able to resist such types of temptations and follow what is needed for our betterment. Because money is so easy to spend these days, it must be saved before being spent. A lot of stuff comes in to discussion here and I think kids should be a part of that and taught the amount of hard work that goes in to earn each paisa.

[pawanjain]

The major problem is that these ads are also displayed on TVs where even the kids watch it and get attracted to it.
Government should ban such ads to be displayed on TVs.

Advertisements of Condoms with sultry scenes done by famous actresses are also there, these are usually the gulity pleasures of many kids and were once ours too when internet access was not so common. Same with gambling based ads, in my opinion.

What is needed is awareness to be able to resist such types of temptations and follow what is needed for our betterment. Because money is so easy to spend these days, it must be saved before being spent. A lot of stuff comes in to discussion here and I think kids should be a part of that and taught the amount of hard work that goes in to earn each paisa.

But don't you think that getting addicted towards gambling does more harm then porn ?
Showing condom ads the most that can happen is that a kid can get addicted to porn but if he gets addicted to gambling then he might start stealing money as well and end up in huge losses.
That is my major concern with showing gambling ads on TV.

[Bitcoin Smith]

The major problem is that these ads are also displayed on TVs where even the kids watch it and get attracted to it.
Government should ban such ads to be displayed on TVs.

Advertisements of Condoms with sultry scenes done by famous actresses are also there, these are usually the gulity pleasures of many kids and were once ours too when internet access was not so common. Same with gambling based ads, in my opinion.

Actually government is the one who advertised about condom but with different words or atleast in southern India which is to create awareness about the protection now it became a business then company which manufactures it doing in the creative ways.

But don't you think that getting addicted towards gambling does more harm then porn ?
Showing condom ads the most that can happen is that a kid can get addicted to porn but if he gets addicted to gambling then he might start stealing money as well and end up in huge losses.
That is my major concern with showing gambling ads on TV.

By seeing condom someone intimidated then they need to work on it.

Porn is pretty dangerous too, and it has more psychological effect on an individual like creating an imaginary world of how these things happen is the reason people get divorced and feel not satisfied by their partner, but reality is completely different and for the reference we can even watch the interview of famous porn stars though.

Another serious damage is it can make someone blunt if they consume excessive porn and its also same as any other addiction will have bad effect on the lifestyle.

[TheUltraElite]

But don't you think that getting addicted towards gambling does more harm then porn ?
Showing condom ads the most that can happen is that a kid can get addicted to porn but if he gets addicted to gambling then he might start stealing money as well and end up in huge losses.
That is my major concern with showing gambling ads on TV.

The ads are there to promote family planning not get people addicted to porn. It is how we take things, someone may get excited and wish to watch porn. Similarly someone may wish to make money and go into gambling. The correct thing is to know that gambling exists and people try their luck but also realize that gambling is a mode of entertainment and so is porn. It is not the actual method to make money.

So take home message, Taxation on gambling (and condoms ) will continue to exist, but gambling and intimacy will continue under the tax officers noses like they always have.
I think we have steered a lot offtopic, myself to blame (Sorry!)