Making money easily is a dream for everyone. Everyone wants to enjoy a bit and make money to upgrade their Living standards. Online Money Games or games played on apps where luck is involved are recent means to earn illicit money. But these may turn out to be illegal activities like gambling, betting, wagering etc.
Online Money Games are a new way of some sports- some betting – playing bets. For Online Money Games India has emerged as a global market for the Gaming industry. India is ranked among top 10 countries in the world where users spent more than 10+ hours in Online Games & E-sports.
It is a $900 million industry as of the year 2021 and as to some experts, it will be valued at $112 billion by 2025. And also, its users will double after the end of the current year from 30 million to 60 million.
By this data, we can see how big is this Industry is. And a question that will be arising in your mind is that is the online money game or esports apps (like MPL, Dream 11, 1x bet, mycircle11) are legal in India or not? Another question is on the income that they will generate is Taxable (i.e., head & rate to be charged) or not.
Are Online Money Games apps legal in India?
India is a diverse country as it has 28 states and 8 union territories and each one has its own laws and regulations for internal trade. These rules are different from each other. So as their restrictions on Online games and esports will also be different.
But in general concept, these popular game developers said that their games require individual skills not played by just luck only. But we all know how many runs a team will make and the individual performance of players is all lucky and not fixed.
So, an interpretation that it is not fully a game or gamble is not clear until the law says or determines it. So, in absence of any clear direction, they are currently legal in India.
But as per media, the Indian government is planning to make more legal amendments. Previous rules related to gambling or gaming were made in 1867, 1955, and 2000. But now the playing technology differs.
Are Online Money Games taxable or not?
Yes , if any money is earned by or from any individual through these occasional activities, it can improve their living standard. Also, it affects our National Income. So, any such income is Taxable and taxes are charged according to the tax slab rate provided for individuals.
How much tax is charged on Online Money Games?
As per Income Tax Act Section 56(2) (ib), Income from these activities are charged under the head “ Income from other sources”.
So online money games or apps earnings come under “Income from other sources” head as long as any specific category is announced for them.
The Tax rate charged on it is:
The amount earned by individuals – 30.0%
4% cess on 30% – 1.2 %
Total – 31.2%
So overall 31.2% is charged on the earnings made on the Online apps or games.
Conclusion: –
Hence, it does not come under any proper income source and is not a regular form of Income.
So, if you are thinking of investing in online money games, please wait for it some time. Let the government clarify.
Also, do not confuse them with investments. Simply put you cannot depend on the earning surety or amount it can generate. Best way is to get a financial plan (we make in INR999) & invest in a disciplined way.
Also, you cannot plan any goals like kid’s education or retirement or regular flow of income through these.
So, Online Money Games is NO as an option for a good investor.
