In India, casino winnings are subject to taxation under the Income Tax Act. The tax treatment depends on whether the winnings are from games of skill or games of chance. Winnings from games of chance, such as slot machines or roulette, are considered income from other sources and are taxed at the individual\“s applicable income tax slab rate. However, if the winnings exceed Rs 10,000, the casino is required to deduct Tax Deducted at Source （TDS） at 30% under Section 194B of the Income Tax Act.
For games of skill, such as poker or rummy, the tax treatment may differ. The courts have recognized that games of skill involve a substantial degree of mental ability and are not purely based on luck. As a result, winnings from these games may be treated differently, but it is essential to maintain proper records and declare the income in your tax returns.
It is crucial for Indian taxpayers to understand their obligations regarding casino winnings. Failure to report such income can lead to penalties and interest under the Income Tax Act. Additionally, non-resident Indians （NRIs） who win money at casinos in India are also subject to TDS, and they may need to file tax returns in India depending on their total income.
To comply with tax laws, winners should obtain a TDS certificate from the casino and include the winnings in their annual tax return. Proper documentation and consultation with a tax professional can help ensure compliance and avoid legal issues. |
