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Yes. Money won through an online fantasy game is covered by India’s online-game tax rules when the game is offered over the internet. Annual net winnings are taxed at 30% under section 115BBJ. Section 194BA generally requires the intermediary to deduct 30% tax from net winnings when you withdraw money and again on any net winnings left in the account at the end of the financial year. Your tax return must show the income that corresponds to the TDS reported in Form 26AS and the Annual Information Statement (AIS).
Which tax rules apply to fantasy-game winnings?
Fantasy-sports contests offered through an internet platform fall within the online-game regime when they meet the statutory definition of an online game. Two provisions work together:
- Section 115BBJ: taxes annual net winnings from online games at 30%. It applies from 1 April 2024, beginning with assessment year (AY) 2024–25.
- Section 194BA: requires tax deduction at source (TDS) on online-game net winnings. It took effect on 1 April 2023 and applies at withdrawal and, if winnings remain, at the end of the financial year.
For AY 2024–25 onward, online-game winnings are dealt with by the specific section 115BBJ rule rather than the older section 115BB provision. The 30% rate applies to the annual net-winnings amount; that special-rate tax is added to the tax otherwise payable on your other income. A platform’s TDS is an advance collection of this liability, not a replacement for reporting the winnings in your return.
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What counts as “net winnings”?
Rule 133 prescribes an annual calculation for section 115BBJ. It uses the activity in the user account during the financial year, not simply the amount transferred to your bank account.
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| Symbol | Meaning under Rule 133 |
|---|---|
| A | Aggregate amount withdrawn from the user account during the financial year |
| B | Aggregate non-taxable deposits made by the assessee during the financial year |
| C | Opening user-account balance at the beginning of the financial year |
| D | Closing user-account balance at the end of the financial year |
The annual formula is:
Net winnings = (A + D) − (B + C)
This is why “cash withdrawn minus cash deposited” can produce the wrong result. The opening balance and the closing balance are part of the statutory calculation, and only deposits that qualify as non-taxable deposits are included in B. A platform may separately identify taxable and non-taxable deposits; preserve that classification rather than treating every entry fee, bonus or transfer as deductible.
Illustrative annual calculation
Assume an account has an opening balance of ₹2,000 (C), non-taxable deposits of ₹8,000 during the year (B), withdrawals of ₹25,000 (A), and a closing balance of ₹3,000 (D). The annual net winnings are ₹18,000: (₹25,000 + ₹3,000) − (₹8,000 + ₹2,000). At 30%, the section 115BBJ tax on that illustrative amount is ₹5,400. The figures are examples of the formula, not a substitute for the platform’s account-level statement.
How section 194BA TDS is deducted
The statutory TDS rate under section 194BA is 30%. There is no general ₹10,000 threshold in this provision. TDS is based on the net winnings calculated under Rule 133, so even a relatively small withdrawal can be relevant if it contains net winnings.
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For the first withdrawal in a financial year, the prescribed calculation uses the withdrawal amount less the relevant non-taxable deposits and opening balance: A − (B + C). For later withdrawals, the intermediary uses the cumulative Rule 133 method, taking earlier withdrawals and taxable deposits into account. If the calculated net winnings for a withdrawal are zero or negative, the amount for that withdrawal is treated as zero and no TDS is due on that calculated amount.
The platform may therefore deduct tax from one withdrawal but not another, even when the two withdrawals are similar in size. The result depends on the running account history, not on a flat deduction from every rupee withdrawn.
On the year-end balance
Section 194BA also covers net winnings that remain in the user account at the end of the financial year. The intermediary calculates the year-end amount and deducts the applicable TDS, so a player can see tax deducted without making a year-end bank withdrawal. This is the statutory requirement to deduct “at the time of withdrawal as well as at the end of the financial year.”
Prizes paid partly or wholly in kind
If a prize is wholly in kind, the person releasing it must ensure that the tax is paid before releasing the prize. The same applies where a mixed cash-and-kind prize does not contain enough cash to cover the TDS. The prize cannot be released while leaving the required tax unpaid merely because the cash component is too small.
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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteHow multiple wallets and accounts are treated
CBDT Circular No. 5 of 2023 explains that each qualifying wallet or user account is considered and that deposits, withdrawals and balances are aggregated as prescribed. Do not assume that opening a second wallet resets the calculation. Download statements for every wallet, sub-account or game account connected with the same intermediary and check how the intermediary has aggregated them.
Transfers between accounts belonging to the same user with the same intermediary are generally not treated as withdrawals or deposits. Keep the transfer records anyway, because an apparent gap between two statements may otherwise look like an unreported withdrawal or deposit during reconciliation.
Records to keep for each financial year
Create a separate folder for every platform and wallet. Retain the following records for the year in which the activity occurred:
- Complete deposit, withdrawal and transaction statements.
- Opening and closing wallet balances.
- Contest-entry, prize and bonus records, with taxable and non-taxable deposits distinguished wherever the platform provides that information.
- The platform’s annual net-winnings or TDS statement.
- Form 16A, where issued, plus downloaded Form 26AS and AIS entries.
- Bank statements showing withdrawals and any tax payments made by you.
- The filed return, e-verification confirmation and acknowledgement.
Keep the original downloadable files, not only screenshots. A spreadsheet that reproduces the Rule 133 calculation for each wallet makes it easier to explain a difference between the platform statement and your own bank records.
Step-by-step return-filing workflow
- Build the account schedule. For each platform, record the opening balance, every qualifying deposit, each withdrawal, the closing balance and the platform’s stated annual net winnings. Apply the Rule 133 formula and investigate any difference before filing.
- Download government tax records. Obtain Form 26AS and AIS for the relevant assessment year. Check the deductor name, section code (194BA), gross amount and TDS amount against each platform statement. Keep Form 16A where the deductor has issued it.
- Reconcile TDS, not just cash. Claim only the TDS that actually appears in Form 26AS or AIS. If a platform statement shows a deduction that is absent from those records, do not claim the missing credit as though it were already deposited with the government.
- Report the income under section 115BBJ. Enter the online-game net winnings in the return under the applicable income-from-other-sources schedule and ensure the amount offered as income supports the corresponding 194BA TDS entry. Do not report only the bank withdrawals if the Rule 133 annual amount is different.
- Select the ITR form from your complete income profile. ITR-2 is available to an individual or Hindu Undivided Family (HUF) that does not have income from business or profession and includes winnings under income from other sources. If you also have business or profession income, another ITR form may be required. Fantasy winnings alone do not decide the form.
- Pay any balance due. TDS may be lower than the final tax on the annual net winnings or may not cover tax arising from your other income. Pay the shortfall shown by your computation before submitting the return.
- Submit and e-verify. Complete e-verification, save the acknowledgement and retain your calculation workbook and source statements with the return records.
For AY 2026–27, validation rules specifically check that TDS reported for online-game winnings under section 115BBJ is matched by corresponding income offered in the return. A mismatch can cause an error or trigger a notice, so reconcile the figures before submission rather than relying on a later correction.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Choosing between ITR-2 and other forms
| Your wider income profile | Likely treatment | What to verify |
|---|---|---|
| Individual/HUF with salary, investments or other non-business income, including fantasy winnings | ITR-2 can be used when the eligibility conditions are met | Include the online-game winnings under the appropriate other-sources schedule and match 194BA TDS |
| Individual/HUF with income from a business or profession | ITR-2 is generally not the appropriate form | Use the form applicable to the business/profession profile and include section 115BBJ income and TDS |
| Uncertain or mixed profile | Form choice depends on all income, losses and status for the year | Check the current Income Tax Department guidance before filing |
Using the wrong ITR form can make a return defective. The fact that winnings are shown as “other sources” does not override the form rules created by your other income.
What to do when the platform statement and 26AS do not match
The platform shows TDS, but 26AS or AIS does not
Save the platform statement and contact the intermediary to ask whether its TDS statement was filed or needs correction. Until the credit appears in Form 26AS or AIS, claim only the amount visible in the government record. You may still need to report the underlying net winnings, because income reporting and TDS credit are separate steps.
26AS or AIS shows TDS, but the platform statement is different
Compare the financial year, deductor name, account identifier and amount. A year-end deduction may appear even though you made no withdrawal in that period. Ask the intermediary for the account-level calculation and corrected certificate if the entry is wrong.
The withdrawal total does not equal annual net winnings
Check the opening and closing balances and the classification of deposits. Annual Rule 133 net winnings include the closing balance, while withdrawal-time calculations use the cumulative account history. A difference is not automatically an error.
Deposits, entry fees, bonuses and losses
You cannot automatically subtract every rupee paid into a fantasy contest from the amount shown by the platform. The statutory formula refers to aggregate non-taxable deposits, opening balance, withdrawals and closing balance. Whether a particular entry fee, promotional credit, bonus or adjustment belongs in one of those categories depends on the account records and the platform’s treatment under Rule 133.
The cited provisions prescribe the mechanics but do not resolve every disputed entry-fee, loss, offshore-platform or game-classification fact pattern. If the platform’s statement is incomplete, the game’s legal classification is disputed, or the activity involves an overseas intermediary, preserve all records and obtain advice from a qualified tax professional before filing.
Quick Recap
Practical checklist before you submit
- Every wallet and user account has been included.
- Opening and closing balances agree with the statements.
- Deposits are separated into the categories shown by the intermediary.
- Annual Rule 133 net winnings have been recomputed and differences documented.
- Withdrawal-time and year-end TDS are both checked.
- Form 26AS, AIS and Form 16A agree, or a correction request is documented.
- The ITR form matches your complete income profile.
- The income reported under section 115BBJ supports the 194BA TDS credit.
- Any remaining tax has been paid and the return has been e-verified.
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