Movie Case Study
The scene shows Thakur Ranjeet Singh (played by Dharmendra) playing a game of cards on a poker table. He is continuously raising the stakes as he has dealt with a good set of cards. Thakur Ranjeet Singh walks away happily as he wins the hand.
In this blog, learning Perspectives will explore the meaning of Gambling Income.
What is Gambling Income?
Gambling income is any income that is derived from a game of chance. Income generated from gambling is fully taxable under income tax laws. In India, Goa and Sikkim are the two states that allow betting and gambling. This is subject to the regulations stipulated by the state governments.
Tax Rule for Gambling
Online gambling isn’t banned in India in all states. Any income that is derived from such games is shown under ‘Income from other sources and a 30% tax is charged on such winnings. There is an additional cess of 4% that is levied on this income.
Some legal cases in India have shown that there is a difference between a game of chance and a game of skill. The game of skill has been removed from under the head of gambling. Gambling is considered to be a game of chance or luck.
Counting Cards – Rain Man
While this may be up for debate. Counting cards can be done by players and then gambling isn’t a game of chance.
The above scene shows Charlie (played by Tom Cruise) and Raymond (played by Dustin Hoffman) playing blackjack at a casino. Raymond is autistic and has savant syndrome. He can count cards and remember hundreds of objects. The counting of cards can be learned too.
Betting and gambling fall under ‘Income from other sources under section 115BB. The state of Maharashtra, Telangana, and Andhra Pradesh have banned online gambling in their respective states.