What are the tax implications for winnings from fantasy sports contests in India?
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Fantasy sports regulations in India have evolved over the years to address the tax implications of winnings from fantasy sports contests. As per the current regulations, the taxation of fantasy sports winnings in India falls under the purview of the Income Tax Act, 1961. Under this act, winnings from fantasy sports contests are treated as ‘income from other sources’ and are subject to taxation. The income tax is applicable to the net winnings earned by participants after deducting the entry fees paid to participate in the contests.
Fantasy sports operators in India are required to deduct a tax at source (TDS) of 30% on winnings above Rs. 10,000. The TDS is deducted by the operator before distributing the winnings to the participants. The TDS serves as an advance tax payment on the winnings and is credited to the participant’s income tax liability. Participants are also required to declare their fantasy sports winnings while filing their annual income tax returns. The winnings should be included under the head of ‘income from other sources.’ It is important for participants to maintain accurate records of their winnings and expenses related to fantasy sports contests for proper tax compliance.
It is worth noting that tax regulations are subject to change, and it is advisable for participants to consult with a qualified tax professional or refer to the latest guidelines issued by the Income Tax Department of India to ensure compliance with the tax implications of fantasy sports winnings.