India Tax and Legal Information and FAQ

Poker is a Game of Skill and a Mind Sport, and it is legal in India.

According to the Indian Public Gaming Act, games of mere skill are exempted from the act and are considered to be legal. Various instances in the Act, such as Section 12, 13A, 13B and others refer to mere skills as being exempted from the act.

Several Indian States, such as West Bengal, Karnataka, and Nagaland have specifically recognised poker as a game of skill.

Our platform partner PokerStars is the biggest and most regulated poker brand in the world, with licenses across the globe.

A Game of Skill is where the outcome is predominantly determined by a player’s level of skill, and not chance. These include skills like logical thinking, strategic movements, memory and association of an opponent’s playing style, reading betting patterns, quick reactions and so on.

Under Section 194B of the Income Tax Act, any person responsible for paying any amount as winning will attract Tax at Source, and the payer (PokerStars in this case) has to deduct TDS at the rate of 30% (plus Cess and Surcharge of 0.9%) if such amount is in excess of 10,000 INR.

TDS is applicable at the time of payment, which is when a Player’s 'Winnings' are calculated.

As per the Indian Tax Laws, no TDS or Tax is applicable if the Winning amount is less than 10,000 INR in a single day (IST 0 Indian Standard Time), from 00:00 (midnight) to 23:59 hours.

According to the Indian Tax laws, TDS on winnings from card games is on a gross basis, so players cannot deduct their losses and expenses to determine taxable income.

Thus, Winnings more than 10,000 INR are subject to TDS of 30% (exclusive of surcharge and cess) and payment to the player will be after deduction of such taxes.

To give an example:

• A player deposits 10,000 INR
• Player uses 2,000 INR of that to play a game and wins 15,000 INR
• Their Cashier Balance is now 15,000 INR (Winnings) + 8,000 INR (Previous Unused Balance) which equals 23,000 INR total
• Player requests for a withdrawal of their total balance of 23,000 INR
• In respect of the remaining deposit amount i.e. 8,000 INR, no tax will be withheld and the player will be refunded these unused funds.
• The remaining winning amount is 15,000 INR, on which 30% withholding tax (plus 0.9% Cess & Surcharge) will be applicable before the payment is made to the player

As a rule, a player’s Winnings are always utilised first, and deposits are used only if there is no Winning Balance.

For Withdrawals, a Player’s previously unused deposits are always refunded first, post which the Winnings over 10,000 INR (if any) are subject to TDS.