Tax on Dream11: Income Tax on Winnings from Online Betting Apps
- PRITI SIRDESHMUKH
- Sep 22
- 5 min read
Updated: Sep 29
The practice of betting on online fantasy sports applications has grown significantly over time. People from all around India, for instance, begin betting on the results of forthcoming matches whenever the Indian Premier League is held. According to court regulations, these actions are legitimate and, as such, subject to taxation. Winnings from fantasy sports like Dream 11, MPL, and My11Circle are liable to a flat rate 30% tax under section 115BBJ of the Income Tax Act, 1961. Therefore, you must understand the taxability of winnings on such apps if you are considering betting on your preferred team.
Table of Contents
Tax Rate on Dream11 Winning Amount
In India, everyone's income from online gaming apps is subject to taxes. Earnings in cash or in kind from online gaming applications such as Dream11, MPL, etc., are taxable under the heading of "Income from Other Sources" under section 115BBJ of the Income Tax Act. Tax at the stipulated rate of 30%, including Cess 4% and surcharge, will be imposed appropriately. The Income Tax Act's Section 194BA stipulates a 30% tax deduction at source on net wins from these kinds of online gaming apps. Previously, under section 194B, tax was only deductible if profits exceeded Rs. 10,000. The income tax law no longer has such a threshold, according to Budget 2023. With effect from FY 2023–2024, income from online gambling apps is subject to taxation under section 115BBJ (inserted via the Finance Act 2023).
Before the system deposits your wins into your bank account, tax is subtracted at the source when you win on these online gambling platforms. TDS is computed on the whole value of the prize if it includes both cash and non-cash components. Nevertheless, just the cash portion is deducted. Before releasing the winning sums to you, the payer must ensure that you have paid the necessary taxes to the government on such income, just in case the cash component due does not include the TDS applicable on your winnings. At the end of the current fiscal year, a TDS deduction will take place if you choose not to withdraw your winnings. Additionally, earnings from online gaming are exempt from Section 206 AB. Therefore, TDS at a higher rate is not applicable even if you do not file an ITR.
Calculation of Taxable Dream11 Winnings
We must determine the net winnings for the year in order to compute the tax for the year at the flat rate of 30%.
Net Winnings = Total withdrawals made during the year + total amount at year's end - (opening balance at year's start plus total non-taxable deposits made during the year)
Computation of net winnings for each withdrawal's TDS deduction,
Case 1: The year's first withdrawal
Net winnings = Withdrawal amount – (opening balance at the start of the year + all deposits made up until the initial withdrawal)
Case 2: Subsequent withdrawals
Net winnings = Withdrawal amount up to now, including the present one - (opening balance at the start of the year + total deposits made up to now + winnings on which you have paid tax on previous withdrawals up to now)
Case 3: Taxable winnings at the end of the year
Net winnings = Total withdrawal amount during the year + balance amount in the user account - (opening balance at the start of the year + total non-taxable deposits + total winnings during the year in which tax is already paid)
Tax Implications for Dream11 Winners
When the person files a tax return, the income is subject to a fixed 30% tax rate under section 115BBJ as casual income. This revenue is included in "Income from Other Sources". Also, the taxpayer may claim a credit for the TDS during ITR filing. The winner needs to submit an ITR for the year when the winning sum was received. Such a person must nevertheless file an ITR and pay tax on the winnings at the rate of 30% plus appropriate cess and surcharge, even if he hasn't filed one in the past or if his income was below the basic exemption limit. Furthermore, no one is qualified for a deduction under sections 80C to 80U or a refund under section 87A for this kind of income.
CBDT Guidelines
Guidelines have been released by the Central Board of Direct Taxes (CBDT) to ensure adherence to these clauses:
Gaming platforms are required to collect winners' Permanent Account Numbers (PANs) and provide TDS certificates, which guarantee that the tax is sent to the government on time.
In order to enable precise TDS deduction, winners must give the gambling sites their PAN. Even if TDS has been subtracted, they still need to include their profits on their income tax filings.
Are Online Gaming Platforms Legal in India?
Until recently, there were no federal laws in India that forbade internet gambling. With the exception of lotteries and games of skill, the Public Gambling Act of 1867 forbids wagering on any game that is based on chance. Since it was passed prior to the development of the internet, online gambling is not mentioned. Furthermore, there is no information on the subject in the Information Technology Act of 2000. Therefore, the majority of Indians wagered freely on online fantasy gambling sites. States, however, could create their own legislation to control or outlaw these kinds of operations. Gaming regulations and licensing procedures are in place in Nagaland, Meghalaya, and Sikkim. Additionally, Nagaland has a licensing body for internet casinos and sports betting.
India approved a measure in August 2025 to ban these games, claiming they were making people more and more addicted and causing them to go into financial trouble. According to the new law, providing or permitting such services is illegal and carries a maximum three-year jail sentence as well as a fine of up to Rs. 1 crore. The action has been justified by the government as a measure to shield customers from the downsides of gambling.
Conclusion
It is difficult to predict the future course of this issue given the current situation regarding the legality of fantasy game programs on the internet platform. Therefore, it is advised that you move cautiously and wait until more is available on the actual legality of Dream11 and other online gaming apps. As of now, Dream11 has decided not to challenge the validity of the new law. Additionally, since betting is the means by which financial gains are made, it is best to just wager as much as you can afford to lose.
Frequently Asked Questions
Is Dream11 prize money taxable?
Yes. Section 115BBJ imposes taxes on such prize money, whereas section 194BA allows for a 30% tax deduction at the source.
How much tax is applicable to Dream11 winnings?
The tax rate on such winnings is 30%. Section 194BA of the Income-tax Act allows for the deduction of TDS on such prize money at the source.
Is TDS on online gaming refundable or not?
Winnings from online gaming are subject to 30% taxation and cannot be deducted. However, there won't be any reimbursement because TDS under section 194BA will also be 30%.
Where to show online gaming income in ITR?
According to section 115BBJ, online gamers are required to report their winnings under the "Income from Other Sources" section of their income tax returns (ITR) and make the appropriate tax payments. Any type of online game that involves skill or chance is subject to the tax regulations.
Is Dream11 going to be banned in India?
Following the government's Online Gaming Bill, which outlawed real-money gaming and enforced severe fines for infractions, Dream11 closed its real-money gaming operations on August 22, 2025. The company is looking into new business endeavours like FanCode and has switched its fantasy sports platform to a free-to-play basis.
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