ITR Filing 2025: Income from online gaming? Here’s how you can file your income tax return

In the last decade, the online gaming industry in India has seen massive growth. The industry gained so much because of offering real money to people on the platforms, including battlegrounds, sporting games, quizzes, and card games. But now the government has banned the real money games.

On Thursday, August 21, the parliament passed a bill to ban online games played with money. The sudden ban has shocked the investors as well as online gaming startup founders.

As the ‘Promotion and Regulation of Online Gaming Bill 2025’ has been passed, do you know that any income or loss generated from such games in FY25 must be adjusted while filing income tax returns?

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In a notification and circular dated May 22, 2023, the Central Board of Direct Taxes (CBDT) clarified the applicability of TDS. Any earnings that a user draws from winning online games must have TDS deducted at a rate of 30 per cent by online gaming companies. The purpose of Sections 115BBJ and 194BA is to tax the user’s profits on various gaming platforms. 

Here’s how you can file your income tax return for income from online gaming for FY 25:

Winnings from online gambling platforms must be declared on your income tax return under “Income from Other Sources” if you received them during FY 2024–2025.

Sections 115BBJ and 194BA 

Section 115BBJ of the Act taxes the net winnings at a rate of 30 per cent. Section 194BA of the Act requires the person in charge of paying the net wins to deduct TDS at the end of the fiscal year, if earlier, at the moment of withdrawal.

Understand with an example

Imagine you have paid Rs 2,000 as an entry fee to enter an online game and won Rs 50,000 from that. 

In such a case, the gaming firm will deduct your TDS on Rs 48,000 (Rs 50,000 – Rs 2,000) at 30 per cent. 

In light of this, you will be required to pay Rs 14,400 in taxes, which will be transferred into the government’s account. The remaining Rs 33,600 will be credited to your account as your winnings.

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