The IUP Journal of Law Review
Earnings from Online Gaming and Tax Implications: The Indian Scenario

Article Details
Pub. Date : July' 2023
Product Name : The IUP Journal of Law Review
Product Type : Article
Product Code : IJLR040723
Author Name : Ankit Singh
Availability : YES
Subject/Domain : Arts & Humanities
Download Format : PDF Format
No. of Pages : 07



The online gaming industry has been growing exponentially. With more and more people owning smartphones, personal computers, and affordable data packs, the industry has seen a massive spurt. New types of attractive games and massive prizes are attracting thousands of new gamers. According to some estimates, around 150,000 players and 60,000 teams from India are involved in online gaming, which includes eSports and online betting/gambling. They have become one of the easiest and relatively risk-free ways to earn money by winning quick cash, depending both on chance and skill. With such massive capital involved, issues relating to taxation arise. Different amounts of tax are levied depending on the nature of the games. This paper provides an overview of the issues relating to direct taxation of income derived from eSports. Various aspects of winnings from online gaming are also looked at through the lens of the Income Tax Act, 1961.


The online gaming industry has rapidly flourished in the past five years or so. It is nothing less than an addiction for the young generation. From live video game streaming to fantasy sports, from card games like poker, rummy, etc. to eSports, the landscape of online gaming in India has taken a giant leap. Users are drawn towards online games mainly because of the pleasure and fun that these games provide. However, opportunities to earn a considerable amount of money through winnings from such games have been the main attraction lately. India's online gaming industry has been pegged to be among the fastest-growing industries in the world, resulting in significant revenue and employment generation. Some extremely popular online games among the youth are Valorant, Call of Duty, Counter-Strike, DOTA 2, etc. The rapid evolution of the online gaming industry has presented vast opportunities for large investment companies to target the users of online games. The entire landscape of online gaming has emerged as a means of mutual benefit. Both players and gaming platforms get an opportunity to earn quick and easy money.