Hot Deal Tax on Dream11 / Games winnings

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Deal Subedar
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As we know “Under Section 194B of the Income Tax Act, 30 per cent tax is deducted on any prize money in excess of Rs 10,000 and other winnings from games, lotteries etc.”
But how about ≤ 10k winnings ?

I won 1 Lakh, 10k, 10k, 10k in a match and got around 1 Lakh credited in my dream11 account for withdrawal.
Dream11 deducted around 30% tax on 1 Lakh single contest winning, and not on 10k+10k+10k.

Is that (10k+10k+10k) is taxable, and many other ≤10k winnings. Do we need to show in IT return ?

I am trying to fetch last 1 year statement on dream11 app, but it shows error to generate because of too many transactions, only last 6 months statement got generated. So not possible to calculate amount credited in dream11, withdrawals can be found in bank statement.

And Dream11 has not sent any TDS certificates on winnings greater than 10k. Has anyone got TDS certificate from dream11. And is there possibility of getting refund of TDS.

36 Comments  |  
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😲😲😲 expert sattebaaj.👌👌👌
Tax on total amount u earned in a year.

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Yes it has to be included in your Income tax Return
And to calculate total winnings, what i do is I search the word “Champion” on my email!
And for tds certificate, you may check your 26AS (its their on your income tax website) after you login! If its not reflecting, contact cc

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Also you cannot deduct cost of the ticket, for calculating tax! Its calculated on gross earnings

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You can contact their customer care they will share the full statement for previous year.

Also check your Form 26AS, there you can find the TDS deducted by them.

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Awake wrote:

Also you cannot deduct cost of the ticket, for calculating tax! Its calculated on gross earnings

So i do not need to find out amount credited in dr11,
and Is there any possibility of getting refund of TDS, deducted at 30%+.

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manishs wrote:

So i do not need to find out amount credited in dr11,
and Is there any possibility of getting refund of TDS, deducted at 30%+.

No deduction, exemption, and even minimum tax slap is not allowed for income for lotteries! Hence if you have won even 5k, you have to pay 30%+cess on 5k

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manishs wrote:

So i do not need to find out amount credited in dr11,
and Is there any possibility of getting refund of TDS, deducted at 30%+.

No refund on this TDS even if your income is below basic exemption limit.

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Awake wrote:

No deduction, exemption, and even minimum tax slap is not allowed for income for lotteries! Hence if you have won even 5k, you have to pay 30%+cess on 5k

So if I added 40k by any payment method and withdrawal total 50k in a year. I need to pay 30%+ tax on 50k irrespective of added amount. What is the difference in winning less or more than 10k in a single contest if we’re paying 30%+ in both cases.
@Wontdisplaymyname

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manishs wrote:

So if I added 40k by any payment method and withdrawal total 50k in a year. I need to pay 30%+ tax on 50k irrespective of added amount. What is the difference in winning less or more than 10k in a single contest if we’re paying 30%+ in both cases.
@Wontdisplaymyname

Its irrelevant how much you paid for the contest! You have to pay tax on winnings (w/o) deducting cost @ 30%+ cess!
Tds is deducted by dream11 only if you won a contest >10k

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manishs wrote:

So if I added 40k by any payment method and withdrawal total 50k in a year. I need to pay 30%+ tax on 50k irrespective of added amount. What is the difference in winning less or more than 10k in a single contest if we’re paying 30%+ in both cases.
@Wontdisplaymyname

exactly no use of winning then u will pay more than 15k in tax on winning net 10k profit.

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Awake wrote:

Its irrelevant how much you paid for the contest! You have to pay tax on winnings (w/o) deducting cost @ 30%+ cess!
Tds is deducted by dream11 only if you won a contest >10k

No. It should be Net Winnings rather than Gross.
No where it is mentioned that tax will be on “Gross winnings” only winnings is mentioned. And also Dream11 deducts Tax on Net winnings not Gross
“Yes! A tax of 30% is deducted at source when your net winning in a contest is more than ₹10,000. The remaining amount (after tax deduction) gets credited to your Dream11 account as ‘Winnings’. You will also get a TDS certificate ONLY if you’ve verified your PAN card on Dream11. "
https://get.dream11.help/hc/en-us/articles/3600....

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soccergiants wrote:

No. It should be Net Winnings rather than Gross.
No where it is mentioned that tax will be on “Gross winnings” only winnings is mentioned. And also Dream11 deducts Tax on Net winnings not Gross
“Yes! A tax of 30% is deducted at source when your net winning in a contest is more than ₹10,000. The remaining amount (after tax deduction) gets credited to your Dream11 account as ‘Winnings’. You will also get a TDS certificate ONLY if you’ve verified your PAN card on Dream11. "
https://get.dream11.help/hc/en-us/articles/3600....

https://cleartax.in/s/taxes-on-lottery-puzzles-...
https://indiankanoon.org/doc/14...1/
Sec 115bb inc all kinds of winnings, and it specifically says no deduction is allowed!
Dream11 might be deducting tds on net basis, but tax payable at year end is on gross basis as per my understanding

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Awake wrote:

https://cleartax.in/s/taxes-on-lottery-puzzles-...
https://indiankanoon.org/doc/14...1/
Sec 115bb inc all kinds of winnings, and it specifically says no deduction is allowed!
Dream11 might be deducting tds on net basis, but tax payable at year end is on gross basis as per my understanding

Deductions means expenses relating to earn that income like interest, salary, depreciation, etc.
There is no where written gross. This is point for litigation may be someday it might reach court clarification. If I pay 1 Re and get back 1 Re where is income?
Even US Revenue Code charges tax on Net Basis.
Supreme Court itself says Dream 11 is Not Gambling but game of skill.

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soccergiants wrote:

Deductions means expenses relating to earn that income like interest, salary, depreciation, etc.
There is no where written gross. This is point for litigation may be someday it might reach court clarification. If I pay 1 Re and get back 1 Re where is income?
Even US Revenue Code charges tax on Net Basis.
Supreme Court itself says Dream 11 is Not Gambling but game of skill.

When did i say it’s gambling? Sec 115bb also says other games of any sort!
Moreover the general drafting of IT laws is as such that no deductions of any sort of expenses are usually allowed under other sources! And yes the drafting is unclear as to gross or net and if goes to litigation, court will probably rule towards net! I took a conservative approach unless there is a specific rule for the same!

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Whatever TDS dream11 deducts, it appears in ITR. Will post a screenshot.
Anything above 10k lead to 30%+ deduction before it get credited to withdrawable balance.

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Awake wrote:

Also you cannot deduct cost of the ticket, for calculating tax! Its calculated on gross earnings

You are so wrong here bro ☹️

You’ve to pay taxes of 30% if you win more than 10000 (It should be more than 10000 not even equal to 10000) and that winnings is calculated after deducting your entry fee and bonuses.

And for small leagues if I deposited 1k and won 2k I’ve to pay tax on 1k i.e my total winnings not on 2k i.e amount after winnings.


Taxes Payable

All prizes shall be subject to deduction of tax (“TDS”) as per the Income Tax Act 1961. The TDS rate prescribed by the Government of India with respect to any prize money amount that is in excess of Rs. 10,000/- is 30% . TDS of 30% shall be deducted on Net Winnings ( prize money amount – contest entry amount – cash bonus). In case of any revisions by the Government of India to the aforementioned rate in the future, TDS will be deducted by Dream11 in accordance with the then current prescribed TDS rate. Winners will be provided TDS certificates in respect of such tax deductions. The Winners shall be responsible for payment of any other applicable taxes, including but not limited to, income tax, gift tax, etc. in respect of the prize money.

Source https://www.dream11.com/games/fantasy-cricket/t...
(Point 15 – 4th Part)


Do you deduct tax on winning?

Yes! A tax of 30% is deducted at source when your net winning in a contest is more than ₹10,000. The remaining amount (after tax deduction) gets credited to your Dream11 account as ‘Winnings’. You will also get a TDS certificate ONLY if you’ve verified your PAN card on Dream11. 


Here’s some info on how we calculate your net winnings:

point_right You joined a contest with Entry worth ₹2,000 and won ₹12,000
Your Net Winnings will be (₹12,000 – ₹2,000) = ₹10,000. There is no TDS for this contest since tax is only applicable when your net winning is more than ₹10,000. grinning

If you win Rs. 13,000 in this contest, your net winning will be (₹13,000 – ₹2,000) = ₹11,000 and a 30% TDS will be applicable on ₹11,000. innocent

point_right You joined a contest with Entry worth ₹1,000 used a Cash Bonus worth ₹500, won ₹20,000
Your Net winnings will be ₹20,000 – (₹1000 – ₹500) = ₹19,500. Here, ₹500 Cash Bonus being a promotional incentive, is excluded while working out TDS on net winnings. sunglasses

Sourcehttps://get.dream11.help/hc/en-us/articles/3600...#:~:text=Yes!,your%20PAN%20card%20on%20Dream11.

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Awake wrote:

https://cleartax.in/s/taxes-on-lottery-puzzles-...
https://indiankanoon.org/doc/14...1/
Sec 115bb inc all kinds of winnings, and it specifically says no deduction is allowed!
Dream11 might be deducting tds on net basis, but tax payable at year end is on gross basis as per my understanding

@Vaastav refer this and other msgs in the thread!
Logically it’s correct, and since my personal winnings aren’t much i took it as gross in my itr!
But there is no clear legislation for this

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Awake wrote:

@Vaastav refer this and other msgs in the thread!
Logically it’s correct, and since my personal winnings aren’t much i took it as gross in my itr!
But there is no clear legislation for this

Dream11 is not gambling as per Supreme Court itself.
According to Income Tax Act , “business” includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture.
If I am investing my substantial time and efforts for earning income in Dream 11 this can be classified as business as well. But it is for the courts to decide and settle it.
If it is classified as a business you can take all deductions.

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soccergiants wrote:

Dream11 is not gambling as per Supreme Court itself.
According to Income Tax Act , “business” includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture.
If I am investing my substantial time and efforts for earning income in Dream 11 this can be classified as business as well. But it is for the courts to decide and settle it.
If it is classified as a business you can take all deductions.

Then why is dream11 deducting tax @ 30%, which is only applicable for 194b- Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort? Or 194bb

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Awake wrote:

Then why is dream11 deducting tax @ 30%, which is only applicable for 194b- Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort? Or 194bb

I am saying from Assessee Point of View.

Dream11 has obligation to deduct as it falls in definition “other game of any sort”

Sec 194B. The person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle or card game and other game of any sort in an amount exceeding ten thousand rupees shall, at the time of payment thereof, deduct income-tax thereon at the rates in force:

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This is From US not from India. But It can be applied in Indian Context as well .It will Go
for litigation and Courts to decide.

Reporting income or losses from fantasy sports as business income
If you can establish that you play fantasy sports as a business, you can report your net profit as business income on Schedule C. The great advantage to this tax choice is that you can then report all losses as well. If you have a net loss for the year, you can use that loss to reduce taxable income from jobs you hold or other businesses you run.

The IRS allows you to claim fantasy sports as a business if you can convince them it is not a hobby and that:

You engage in fantasy sports regularly, and
Treat it as a business activity with the intention of earning a profit
The IRS may consider an activity to be a business if it earns a profit at least two years out of every five.

https://turbotax.intuit.com/tax-tips/general/ta...
Another from US CPA https://www.cpajournal.com/2019/06/17/earning-r...

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soccergiants wrote:

I am saying from Assessee Point of View.

Dream11 has obligation to deduct as it falls in definition “other game of any sort”

Sec 194B. The person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle or card game and other game of any sort in an amount exceeding ten thousand rupees shall, at the time of payment thereof, deduct income-tax thereon at the rates in force:

Basically what you mean is, you (“SG”) won a contest on dream11, and hence it will deduct tds as income from games and stuff u/s 194b, but for SG this is not an income from game and u will take it as business income.
Don’t think that’s correct.
Also this will reflect in ur 26as as 194b only.

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