The Indian government, the NDA (National Democratic Alliance) will be presenting the 2016-17 union budget on 29th February 2016. While there are many who are hoping for important changes, the gaming industry is hoping for reforms regarding taxation on poker winnings.
To date, the poker winnings taxation has been particularly high, and it is hoped that with the bigger number of professional players, and the increase in the size of the industry, it may be possible to decrease the taxation percentage.
Currently, the Income Tax Act, in Section 115BB, shows a 30% taxation on card game winnings. As noted in a subsection, this amount is also levied on winnings from horse racing, lotteries, crossword puzzles, and any other gambling or betting games.
There have been some protests over the years, however, the authorities have not yet responded with a lower taxation rate.
In 2015, India’s poker industry has grown in leaps and bounds. There are a number of new live poker rooms in Kolkata, and in Bangalore. There are also a large number of poker players who play the game online. The prize pools in large tournaments have also grown, but winnings are severely cut by the 30% taxation. Tax is deducted by the game organizers or operators, and players are given a TDS certificate to show that they have already paid the tax on their winnings.
India has put the responsibility for declaring income from winnings on the players and operators. Should tax fraud occur, it is likely that both foreign or local operators, along with the players who have committed the tax fraud, will be dealt with according to the law.
It is unclear at this time whether any changes will be made or not. The gaming industry has clearly stated its case, and it remains to be seen whether this will be taken into account or not.