A uniform 28 percent Goods and Service Tax (GST) that was recently proposed by a ministerial panel in India called the Group of Ministers (GoMs) is likely to go ahead, and it will greatly affect the online gaming industry, especially some of the major betting companies that operate from within the country. It appears as though they are acting this way in an attempt to reduce the number of online gambling sites that are currently available online in India.
Which companies will have to pay the 28 percent GST tax rate?
The companies that will be forced to pay the flat 28 percent Goods and Services tax rate will be the companies that offer real money games of chance, such as online sports betting sites, lotteries, horse racing, and casinos. At the time of writing, companies that offer games of skill, such as fantasy sports and rummy, must only pay an 18 percent GST, but they could also be forced to play the full 28 percent. The government is looking at taxing the gross gaming value of these companies at 28 percent.
TDS rate for Online Gaming
According to the Finance Act 2023, online gaming platforms are now required to deduct income tax at a rate of 30% on the net winnings in a user's account. This provision is introduced under section 194BA of the Income-tax Act, 1961. The tax is deducted at the time of withdrawal and also at the end of the financial year.
What types of real money gambling sites are there in India?
Today, there are hundreds of fully licensed betting sites in India, but the vast majority of these companies are controlled by foreign operators that operate from outside of Indian jurisdiction, which is how they avoid paying taxes.
The main types of gambling sites that Indians have access to today are the following:
- Online sports betting sites
- Online casinos + live dealer casinos
- Online poker sites
- Online bingo sites
- Online lottery sites
If a company were forced to pay these huge taxes, it would lose a huge chunk of its profits, and at worst, it could end up going out of business. It may also force more Indians to play at foreign-controlled sites that operate from outside of Indian jurisdiction.
What's the legal minimum age required to play at these sites?
To place a wager in the real money mode at any real money gambling website from a smartphone, tablet, laptop, or desktop computer, you must be at least 18 years old. Even if you only want to sign up to practice playing certain games, such as slots, roulette or blackjack, in the free-play demo mode, you still need to be at least 18 years old.
Can Indian gambling sites be trusted?
Yes. Today's most reliable Indian gambling sites are that owned and operated by trusted names with solid reputations can be trusted. These websites are fully licensed by some of today's most renowned online gambling licensing authorities.
They are protected by the highest levels of Secure Socket Layer (SSL) encryption technology, and they accept only the most secure online payment options, such as Visa, MasterCard, PayPal, Skrill, Paytm, AstroPay, and NETELLER, to name just a few trusted methods. These two things go a long way to giving customers the peace of mind that they are using a reliable service. For instance, the reason many online casino customers prefer to use online payment options like PayPal, Skrill, and Neteller is that they don't need to register the details of their bank account with that online casino. Instead, the details of the digital wallet act as a buffer between the bank account and potentially nefarious actors.
The only gambling sites in India that cannot be trusted are the ones that are unlicensed and ones that are not controlled by reputable operators with good reputations. Checking the licences an online casino must have to be legal in not just India but anywhere a player chooses to sign up to is an essential due diligence check. They should display them clearly on the website or in the app. They shouldn't be hard to find. Typically, they are right at the bottom in a footer section with 'About Us' or 'Contact'. What these licences mean is that they are adhering to the regulations and legislations of that jurisdiction, ensuring fair play and data privacy.
What online casino customers want is a fair and secure gaming experience – in addition to the fun – and what they continue to provide is they demand the 3rd party tools and the guarantees from the operators themselves.
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