Is GST charged on online gaming deposits, and how is income tax calculated on winnings? They are separate tax layers: GST applies to the supply of online money gaming, with its value linked to the amount paid or deposited with the supplier on the player’s behalf; income tax applies to a player’s net winnings under account-based rules. Official sources cited here state a 28% GST rate and a 30% special income-tax rate, but those percentages apply to different tax bases and dates.
GST and income tax apply to different amounts
GST concerns the gaming supply, not the player’s net winnings. The official GST materials describe the value of online money gaming by reference to the amount paid or deposited with the supplier on the player’s behalf. The Lok Sabha’s 2025 answer states a 28% GST rate for online money gaming. The Ministry of Finance says that rate took effect on 1 October 2023. Lok Sabha answer AU1339 (2025); Ministry of Finance release (26 March 2025).
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Income tax concerns net winnings calculated for the user. The Income Tax Department’s 2026 notified return-form schedule lists winnings from online games under section 115BBJ at 30%; the Ministry of Finance says this rate applied from assessment year 2024–25. It is not a 30% tax on every deposit or withdrawal. Notification No. 46/2026; Ministry of Finance release (26 March 2025).
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Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →| Question | GST on online money gaming | Income tax on online-game winnings |
|---|---|---|
| What is taxed? | The gaming supply, valued by reference to amounts paid or deposited with the supplier on the player’s behalf. | The user’s net winnings, calculated using user-account activity. |
| Rate and date established by the cited official material | 28%; the Ministry of Finance says this took effect on 1 October 2023. | 30% under section 115BBJ; the Ministry of Finance says this treatment applied from assessment year 2024–25. |
| What the figure does not mean | It is not a tax calculation on the player’s income or net winnings. | It is not automatically charged on every rupee deposited or on each withdrawal considered alone. |
The rate references above come from a 2025 parliamentary answer, a 2025 Ministry release and a 2026 notified return-form schedule. Use the law and forms relevant to the tax year in question; the 2026 rules also contain updated statutory references.
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Do you pay income tax on the full amount deposited?
No. A deposit is not automatically a taxable net win. Rule 135 of the Income-tax Rules, 2026 sets out a year-end calculation that uses aggregate withdrawals and the closing account balance, then subtracts non-taxable deposits and the opening balance. The rules also provide formulas for deductions at first and later withdrawals and account for winnings on which tax has already been deducted. If the relevant balances and deposits offset the withdrawals under the formula, calculated net winnings are zero. Income-tax Rules, 2026, Rule 135.
In these rules, a user account is an account, however named, with the intermediary where deposits or winnings are credited and withdrawals are debited. A non-taxable deposit is a user deposit that is not taxable; taxable deposits include amounts that do not qualify as non-taxable deposits, including sums paid directly to the user outside the user account. The calculation is therefore not simply “all deposits” or “all withdrawals”: the account history and the rule’s categories matter.
How account activity affects the net-winnings calculation
First and later withdrawals
The rules provide formulas for calculating net winnings at the time of first and subsequent withdrawals, alongside the year-end formula. They also account for earlier withdrawals on which tax has already been deducted. A withdrawal can therefore be relevant to withholding without, by itself, being the whole measure of the user’s net winnings.
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Multiple accounts with one intermediary
If the same user has multiple accounts with the same intermediary, deposits, withdrawals and balances are aggregated for the calculation. Transfers between that user’s accounts at the same intermediary are disregarded as deposits or withdrawals for TDS purposes.
Non-cash prizes and promotional credits
For a non-cash prize, the prize’s money equivalent is treated as deposited and withdrawn at the same time for the calculation. Promotional or bonus money that can only be used to play and cannot be withdrawn is ignored while it remains play-only. If it is later converted into withdrawable funds, the rules treat it as a taxable deposit at that point. These distinctions can make a platform’s account records important when checking a deduction or return figure.
Is a game of skill taxed differently?
The statutory definition of online money gaming covers games in which players pay or deposit money or money’s worth in expectation of winning, whether the outcome is based on skill, chance or both. The 2025 Lok Sabha answer reproduces that definition. The cited tax treatment is therefore not limited to games of chance. Lok Sabha answer AU1339 (2025).
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That tax definition does not decide whether a game or operator is lawful. The Ministry of Finance states that betting and gambling are a state subject and that state legislation defines related offences. The fact that a tax rule addresses an activity does not certify that activity as permitted under other law. Ministry of Finance release (26 March 2025).
Which rules should you use for your tax year?
Keep the tax year and the relevant legal text attached to any rate or calculation. The 2026 return-form schedule identifies section 115BBJ and lists the 30% special rate for online-game winnings; the notified 2026 rules set out the account-based computation and include updated statutory references in some provisions. For GST, the latest direct rate statement identified here is the 2025 Lok Sabha answer, while the Ministry release dates the rate’s commencement to 1 October 2023.
The Press Information Bureau’s September 2025 FAQ concerns changes to goods-rate notifications; it does not establish a change to the online gaming service rate. PIB, FAQ-3 on the decisions of the 56th GST Council (18 September 2025).
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Tax treatment does not settle whether online gaming is permitted
GST and income-tax rules address tax treatment; they do not determine whether a particular game or operator is allowed where you live. The Ministry of Finance identifies betting and gambling as a state subject. The cited sources do not establish the commencement, implementation or state-by-state effect of the Promotion and Regulation of Online Gaming Act, 2025. Check current official notices and relevant state law for a specific legality question.
This is a general explanation, not a determination of an individual filing liability. If your calculation involves multiple accounts, non-cash prizes, promotional credits, past TDS or a tax-year transition, consult a qualified Indian tax professional with the platform’s account statement and tax records.
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