Everything you need to know about TDS, tax rates, and ITR forms for online gaming income in FY 2025.
Vanshika verma | Aug 22, 2025 |
Taxation of Online Gaming Income in FY 2025: ITR Rules and New Regulations
With both houses of parliament (Rajya Sabha and Lok Sabha) passing the ‘Promotion and Regulation of Online Gaming Bill 2025‘. the government is now moving to ban online money-based games in India. If any income or loss is generated from such games, Financial Year must be adjusted while filing income tax returns.
When filing income tax returns, any income that is generated via online gaming is treated as Income from Other Sources. Sections 115BBJ and 194BA of the Income tax Act apply to income earned on various gaming platforms.
Section 115BBJ: Income tax on net winnings for the previous fiscal year is imposed at 30%.
Section 194BA: This deals with tax deducted at source (TDS) on net gains credited to the taxpayer’s gaming account at the end of the financial year.
Tax experts said, If any TDS is deducted, it will appear in Form 26AS through Form 16A, and it should be reflected under the Schedule TDS section in your ITR. Significantly, losses from gaming can be adjusted against the income from online gaming.
Income from other sources is a residuary head of income and sweeps in all such income which falls outside the other four heads of income. But certain incomes will always be taxable under the head ‘income from other sources’, like winnings from lotteries, gifts, interest in enhanced compensation, etc.
For income from online gaming, you are required to file ITR-2.
One of the CAs explained that if you file your return through the prescribed ITR form applicable to you, such as ITR-2 or ITR-3 whichever is suitable to your other income and make sure of the accuracy in your return filing, the income tax department cross-verifies it with the data available with the respective platforms.
The Promotion and Regulation of Online Gaming Bill, 2025 seeks to strengthen online gaming regulations by banning the advertising and operation of online money games. This move was taken to address increasing concerns over addiction, money laundering, and financial fraud connected with these applications.
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