Indian gaming app players under CBDT scanner over winnings worth Rs 58,000 crore: Report

The Central Board of Direct Taxes (CBDT) has uncovered that players on an Indian gaming app have earned Rs 58,000 crore in the last three years, setting up a potentially massive tax haul for the Income Tax authority.

“We have started the process of asking the winners to come forward and pay the tax through their updated income tax return filings. If they don’t do so voluntarily, requisite action will be taken,” CBDT chairman Nitin Gupta told Business Standard, without naming the company in question.

At 30 per cent tax plus penalties, the winners have to pay about Rs 20,000 crore, Gupta said.

These winnings are for financial years 2019-20, 2020-21 and 2021-22.

Read | I-T dept checking tax evasion in new areas: CBDT chief

“Whatsoever data we have, we will proceed. It is a humungous amount of data and we are going through it. Some of the winners may have earned more and some less. We have the required information,” Gupta said.

He also said that players will not be allowed to balance their expenses against their wins and losses. "If you have lost the game, you cannot adjust your winnings against that. Each win, just like lottery, is taxed," Gupta said.

The tax on winnings from lotteries, crossword puzzles, races, including horse races, card games, and other games of any sort, gambling or betting is a flat 30 per cent without any basic exemption limit in states where it is not banned.

The payer of the prize money typically deducts tax at source from the winnings and pays the participant the balance.

Gupta told the publication that the investigation into the gaming company was part of a larger scrutiny of online betting and gaming apps and sites.

The department is going into "new areas" of the economy to check tax evasion even as its investigation units are using analytics to sift through voluminous data on Indians holding assets abroad, Gupta said earlier.

"We are covering a variety of sectors of the economy (while undertaking searches and raids). We are not limiting ourselves to real estate or developers only... our action is spread across sections of economy right from healthcare to pharma to developers to industries, manufacturers, service providers etc. We are touching new areas and various sectors of the economy which were never touched like asset reconstruction companies, gaming, betting etc," Gupta said.

(With PTI inputs)