Tax on Gambling Winnings in India

Two taxes, two very different things

If you gamble in India, two taxes can touch your money, and it helps to keep them firmly apart because they work in opposite ways.

The first is income tax on winnings. Anything you win from lotteries, crossword puzzles, horse races, card games, betting and similar sources is taxed at a flat 30%, and in most cases the tax is deducted before the money ever reaches you¹. This tax follows the winnings: it applies whatever your state's rules are on the game itself, and even on winnings from apps that are not legal where you play⁶.

The second is GST, the Goods and Services Tax, and it has nothing to do with whether you win or lose. GST is charged on the money you put into play. Buy chips at a Deltin casino and you pay 28% GST on the purchase⁴. Place a bet on an online game or a horse race and the same rate applies to the full face value of that bet, not just the operator's fee⁵. On a ₹100 entry bet, ₹28 goes to the government before the game even starts⁷.

So a single evening can involve both: GST on the chips when you buy them, and income tax on anything you win. The two never offset each other, and neither is refunded because the other was paid.

What counts as winnings

The income tax side is anchored in Section 115BB of the Income Tax Act, which levies tax on winnings from lotteries, crossword puzzles, races, card games, betting and the like¹. The list is broad, and in practice it covers every form of gambling winnings an ordinary player will encounter.

Under the Income Tax Act, 2025, Section 194 imposes the flat rate on net winnings from online games, and the definition covers both skill-based and chance-based games⁸. So rummy, poker, fantasy sports and pure chance games all fall under the same rate on the income tax side. Poker players in India, for example, are required to pay income tax on all winnings, which is already deducted before the winnings are paid out⁹.

The withholding rule also applies to any winnings from lotteries, horse races, crossword puzzles, card games, gambling or betting exceeding ₹10,000, with tax deducted at the time of payment⁸. In plain terms: if a single prize crosses ₹10,000, the payer normally withholds the tax and hands you the rest.

One point worth knowing: the tax follows the winnings, not the legality of the operator. Winnings are taxed even on illegal apps, whatever your state⁶. Offshore play does not create an escape either; players are expected to report winnings and pay tax where they live, as with any other gambling winnings¹⁰.

TDS on gaming apps: 30% of net winnings

Real money gaming apps in India do not wait for you to file a return. They are mandated to deduct the tax on your net winnings at the time of withdrawal, or on March 31, the end of the financial year, whichever applies first³. The same rule appears across the industry: net winnings on slots are subject to TDS at the time of withdrawal¹¹.

Net winnings simply mean withdrawals minus deposits. A few worked examples show how it lands:

The system also avoids double deduction. If tax has already been deducted on positive net winnings at withdrawal, it is not deducted again on the same winnings on March 31³. So if you withdraw ₹9,000 against ₹8,000 of deposits, your net winnings are ₹1,000, but because ₹300 was already deducted earlier in the year, no further tax is taken³.

At the financial year end there is one final settlement. Say your net winnings for the year are ₹500, so the tax is ₹150. If ₹100 was already deducted during the year, the remaining ₹50 is deducted from your closing balance. If your closing balance is ₹1,000, you carry ₹950 into the new financial year³. All tax calculations then reset on April 1, and the balance as of March 31 is treated as a withdrawal for tax purposes³.

If your net winnings are negative at the end of the financial year, you may be eligible for a tax refund, which you claim while filing your tax return³. Most apps show your tax calculation on the withdrawal page, so you can check what has been deducted before you cash out³.

GST on chips at Deltin casinos

Walk into a Deltin casino in Goa or Sikkim and the GST side starts at the chip counter. Effective October 1, 2023, under Notification No. 51/2023 issued by the Ministry of Finance, GST applies on the amount paid for the purchase of chips or playing coupons for use within Deltin Casinos, at the rate set out above¹³. The rule appears consistently across Deltin's properties and terms, from Deltin Suites to Deltin Denzong and Deltin JAQK¹⁴.

What this means in practice: if you want ₹10,000 worth of chips, the GST is added on top at the point of purchase. The tax is on the purchase itself, not on your play.

And here is the part that surprises people: the GST paid at the time of every purchase of chips or playing coupons is not refunded in the event of a return or encashment⁴. Cash in your chips at the end of the night, win or lose, and the tax you paid to buy them is gone. It is a consumption tax on the transaction, not a deposit.

If you are planning a visit, our pages on casinos in Goa and casinos in Sikkim cover entry, games and getting there.

GST on online games and bets

Online gambling faces the same rate, but on a different base: the full face value of every bet. Central GST rules notified in September 2023 impose the tax on the face value of bets placed in online games and casinos⁵, and the amended GST law provisions for e-gaming, casinos and horse racing came into force on October 1, 2023¹⁷. Under India's newer gaming law landscape, online games remain subject to GST on the full face value of bets¹⁸.

The difference matters. GST is not charged on the operator's profit or fee, but on the entire amount wagered. Put differently, under this regime ₹28 out of every ₹100 betted goes to the government¹⁹.

Horse racing is in the same boat. The tax applies to the full face value of bets placed on horse racing²⁰, a levy in force since July 2017 that the racing industry says has hit it hard²¹. Bookmakers collect GST on all transactions laid on all races²².

Lottery tickets have their own treatment at the state level. Maharashtra, for example, raised GST on lottery ticket sales from 28% to 40%²³, so the tax you pay on a ticket can be higher than the rate on a bet.

Lottery, game show and horse racing prizes

On the income tax side, lottery and similar prizes face the flat rate described above, with TDS at the same rate and the ₹10,000 withholding threshold⁶. But the headline rate is not the whole bill. Once fees and surcharges are added, the total tax on winnings from lotteries, TV game shows, crossword puzzles and horse racing can reach 35.53%². The flat rate is the base; the extras push the effective take higher.

For a sense of scale: a ₹1 crore lottery prize would see roughly ₹30 lakh withheld at source, with the surcharge and cess adjustments settled through your return. The payer handles the deduction; you see the net amount.

If you play the state lotteries, our guides to the India lottery and specific state schemes such as Maharashtra monthly lotteries and Kerala State Lotteries explain ticket prices, draw days and prizes before the tax question arises.

What the tax rules do not cover

India's tax net on gambling is wide, but a few things sit outside it.

First, the skill-versus-chance distinction shapes what counts as gambling at all. Games of skill are exempt from the gambling regime in most jurisdictions, including horse racing, card games such as rummy and poker, fantasy sports and e-sports²⁴. That exemption affects whether an activity is regulated as gambling, though once winnings are taxed as prize income, the flat rate applies to skill and chance games alike⁸.

Second, GST and income tax do not cover each other. Paying GST on your chips or bets does not reduce the tax on winnings, and tax withheld on winnings does not reduce GST on your next purchase. They are separate taxes on separate events.

Third, the TDS system for gaming apps is built around net winnings, not gross winnings. Losses within the app offset wins within the same app and the same financial year, and a negative net position at year end can even lead to a refund of TDS already deducted³. That is a real offset, but only inside the net-winnings calculation, and only on the income tax side.

Finally, note what other countries do, if you are comparing. Casual gambling winnings in Singapore, for example, are treated as windfall gains outside the scope of income tax, with no requirement to keep records²⁵. India takes the opposite approach: winnings are taxable income from the first rupee, at a flat rate, regardless of whether gambling is your hobby or anything more.

For the wider picture of what you can legally play and where, see our guide to gambling in India and gambling laws by state.