How India Taxes an NRI's Winnings from Online Gaming, Lottery, Fantasy Sports and Game Shows: The Flat 30%, Section 115BBJ, and the TDS That Takes It at Source

A reader in Toronto turned a Rs 50,000 fantasy-cricket bankroll into roughly Rs 9,40,000 over an Indian Premier League season on an India-based platform, withdrew it expecting the lot to land in his NRO account, and watched a little over Rs 2,80,000 vanish before the transfer cleared. The platform had withheld 30% on his net winnings under Section 194BA. When he came to me convinced he could claim back most of it by deducting his losing contests, his platform fees, and the time he had spent, I had to tell him the answer NRIs least want to hear about this category of income: there is nothing to deduct, nothing to set off, no basic exemption to soak it up, and his treaty back home would not lower the Indian rate by a single rupee. On top of that, Canada was going to tax the same winning again.

The 30-second answer: An NRI's winnings from online games are taxed in India at a flat 30% on net winnings under Section 115BBJ (from AY 2024-25), and winnings from lottery, game shows, betting, gambling, card games and crossword puzzles at a flat 30% under Section 115BB, in both cases plus 4% cess and any surcharge, with the same rate for NRIs and residents. There are no deductions of expenses, no basic exemption set-off, and no netting of losses. TDS is deducted at source: Section 194BA on online-game net winnings (no threshold) and Section 194B on lottery and game-show prizes above Rs 10,000, both at 30%. No DTAA reduces this rate, and your country of residence will usually tax the same winning again. Declare it in ITR-2 by 31 July 2026 for AY 2026-27.

That gap, between what an NRI expects to keep and what India's winnings regime actually leaves them, is the subject of this guide. Casual income from games and lotteries runs on the harshest flat rate in the Act, harsher in practice than even the 30% on crypto, because every relief an NRI instinctively reaches for is switched off. This guide is part of our NRI tax filing series for AY 2026-27; start there for the full return picture and come back here for the gaming and lottery detail. I will walk through the two sections that set the rate, the two TDS sections that collect it, how a non-resident is actually taxed, why no treaty helps, the home-country double tax, the GST context on the platform side, and the edge cases that catch people out. I will also be honest, because this is the part that has changed underneath everyone, that real-money online gaming itself has been outlawed in India since August 2025, which reshapes who this even applies to going forward.

Two sections, one punishing idea: Section 115BB and Section 115BBJ

India treats winnings from games and lotteries as a special category of income called "casual income," and it taxes that category at a single flat rate that ignores your slab, your residency, and almost every relief in the Act. There are now two sections that do this work, split by the kind of game.

Section 115BB is the older and broader one. It taxes winnings from lotteries, crossword puzzles, races including horse races, card games, and other games of any sort, and gambling or betting of any form, at a flat 30%. This is the section that catches a state-lottery prize, a Kaun Banega Crorepati cheque, a Dream Home game-show win, a horse-race payout, or a casino jackpot.

Section 115BBJ is the newer one, inserted by Finance Act 2023 and effective from AY 2024-25. It carves out winnings from online games and taxes the net winnings at a flat 30%. The reason for the carve-out is that online real-money gaming did not fit cleanly into the old per-game lottery model, where each prize stood alone. Online platforms run thousands of contests across a year with deposits, withdrawals and a running wallet balance, so Parliament built a section that taxes the net result of the year's play rather than each contest in isolation. The rate is the same 30%, but the base, net winnings, is the structural difference, and I will come back to exactly how that net is computed.

On top of the 30% under either section sits a 4% health and education cess, and a surcharge where your total income crosses the surcharge thresholds. So the headline rate is 30%, but the effective minimum rate, once cess is added, is 31.2%, and higher once surcharge bites. For most NRIs whose only Indian income in a year is a one-off winning below Rs 50 lakh, surcharge will not apply and 31.2% is the real number. The cess is not optional and is not something the platform sometimes forgets, it is baked into the TDS rate the platform applies.

The single most important thing to internalise is that this rate is identical for NRIs and residents. There is no NRI premium and no NRI discount on winnings. Where the non-resident status changes things, as we will see, is on the collection mechanics and on the treaty question, not on the rate itself.

Why this is, in practice, the harshest income in the Act

The 30% headline is not what hurts. What hurts is everything that is switched off around it. Three reliefs that an NRI uses by habit on every other kind of income simply do not exist for winnings.

The first is that no expenditure or allowance is deductible. When you compute income under almost any other head, you subtract the costs of earning it. Not here. Under both 115BB and 115BBJ, you cannot deduct the entry fees you paid into contests you lost, the platform's commission, the cost of travel to a game show, the price of the lottery tickets that did not win, or any advisory or coaching cost. The tax is computed on the winning, gross of every rupee you spent to chase it. The lone exception is structural and built into 115BBJ itself: because that section taxes net winnings, your own deposits are netted out before the 30% applies, but that is a definition of the base, not a deduction of expenses. Under 115BB for a lottery, there is no netting at all, the gross prize is taxed.

The second is that the basic exemption limit cannot shelter it. Every Indian taxpayer has a slice of income that is tax-free, the basic exemption, and an NRI gets that exemption too. But you cannot apply it against winnings. Even if a winning is your only Indian income for the year and sits well below the exemption threshold, the 30% still bites from the first rupee. The exemption shelters your other income; it never touches a 115BB or 115BBJ winning. This is a settled and deliberate feature, not an oversight.

The third is that losses cannot be set off or carried forward. A loss in one game cannot be netted against a win in another, a gaming loss cannot be set against any other head of income such as salary, rent or interest, and it cannot be carried forward to a future year. Each winning stands alone and is taxed in isolation. The only place any netting happens is inside the 115BBJ net-winnings computation for a single online-gaming wallet across the year, which is a mechanical definition, not a true loss set-off across games or heads.

Worth stating plainly, because NRIs reach for these by reflex: the Section 87A rebate does not apply to NRIs and in any case never applied to special-rate income like this, and there is no equivalent of the Rs 1.25 lakh allowance you get on equity gains. The 30% is the whole story, gross, from rupee one.

Section 194BA: TDS on online-game net winnings, with no threshold

For an NRI, you will almost never pay this tax by writing a cheque to the department. You will pay it because the platform withheld it before you ever saw the money. Two TDS sections do this, and the online-game one is the stricter of the two.

Section 194BA, also inserted by Finance Act 2023 and live from 1 April 2023, requires the online-gaming platform to deduct TDS at 30% on a user's net winnings. Its defining feature is that it has no threshold at all. The old lottery TDS section only deducted on prizes above Rs 10,000; 194BA scrapped that floor for online games, so even modest online-game net winnings are withheld. The platform deducts at two trigger points: at the time of each withdrawal during the year, and again on any net winnings remaining in your wallet at the end of the financial year if you did not withdraw them. This dual trigger is why your year-end wallet balance can be hit even if you never cashed out.

The computation of "net winnings" is mechanical and laid down in Rule 133 of the Income-tax Rules, refined by CBDT Circular 5 of 2023. In broad terms, for a withdrawal, net winnings are your total withdrawals minus your total non-taxable deposits minus your opening wallet balance, computed cumulatively across the year so that each withdrawal is taxed only on the genuinely new winnings it represents. The rule exists precisely so that you are not taxed on simply pulling out your own deposited money. I will work the arithmetic below, because this is the single most misunderstood part of the regime.

One NRI-specific trap sits behind the 30% rate. If your PAN is not furnished or not active, the deduction can be pushed higher under the general PAN-failure provisions of the Act, and you lose the clean credit trail you need to reconcile the withholding in your return. NRIs who let a PAN lapse or never linked it where required can find more withheld than the headline 30% and a messier recovery. Before you play a rupee on an India-based platform, confirm your PAN is live and correctly mapped to the account. Our guide on PAN for NRIs covers how to check and fix this.

Section 194B: TDS on lottery and game-show winnings, above the Rs 10,000 threshold

For the older category, lottery, game shows, crossword puzzles, card games, betting and gambling, the relevant withholding section is Section 194B. The payer, whether a lottery distributor, a TV game-show producer or a betting operator, must deduct TDS at 30% where the winning exceeds Rs 10,000.

The Rs 10,000 threshold is the headline difference from 194BA, but it is widely misread. From AY 2026-27 the threshold is assessed on aggregate winnings from a single payer during the financial year, not strictly per individual prize as the older reading held, so a payer who pays you several smaller prizes adding up beyond Rs 10,000 in the year must deduct. Either way, once the threshold is crossed, TDS applies to the entire winning, not just the slice above Rs 10,000. Win Rs 10,001 and TDS is computed on Rs 10,001, not on Rs 1.

The companion provision, Section 194BB, applies the same 30% TDS to horse-race winnings above Rs 10,000, paid by a bookmaker or a licensed race-course. The mechanics mirror 194B.

Here is the trap that catches NRIs most often: the Rs 10,000 threshold governs withholding, not the tax itself. If you win a Rs 8,000 lottery prize, no TDS is deducted, but you have not escaped tax. You still owe 30% plus cess on that Rs 8,000, and you must declare it in your return and pay it as self-assessment tax. The absence of a TDS deduction is not a clean bill of health. Plenty of NRIs assume a small, untaxed-at-source prize is theirs to keep and discover otherwise when an AIS mismatch surfaces. Our guide on the AIS and Form 26AS for NRIs explains how the department now sees these payments even when no TDS was cut.

How a non-resident is actually taxed: Section 195, sourcing, and the flat rate

This is where NRI status genuinely changes the mechanics, even though it does not change the rate. The starting question for any NRI income is always: is this winning taxable in India at all? An NRI is taxed in India only on income that accrues, arises, or is received in India, or is deemed to. For winnings, the source follows the game. A prize from an India-based platform, an India-conducted lottery, an India-located game show or an India-located race is India-sourced and squarely within India's net, taxed at the flat 30% under 115BBJ or 115BB regardless of where you live. A genuinely foreign winning, say a Las Vegas casino jackpot won in person by a UAE-resident NRI, is foreign-sourced and outside India's charge while you are a non-resident, though your country of residence may tax it.

On the collection side, where the payer deals with a non-resident, the withholding can flow through Section 195 (the general TDS-on-non-residents section) rather than the resident-facing 194B or 194BA, but the practical outcome is the same flat 30% plus cess and surcharge. Indian platforms that onboard NRIs typically apply the 30% rate directly. The label of the section matters less than the number, which does not move.

Two consequences follow for the NRI. First, because winnings are taxed at a flat special rate, an NRI whose only Indian income for the year is a winning has nothing to gain from filing to "apply slabs," there are no slabs here. But filing still matters, because excess withholding, surcharge wrongly applied, or a sub-threshold prize you owe tax on all get reconciled only through the return. Second, an NRI cannot use Form 13 to get a lower-deduction certificate down to nil on this income the way they sometimes can on rent or capital gains, because the statutory rate is itself 30% with no scope for a lower true liability. The withholding already matches the tax. Our guide on the lower-TDS certificate under Form 13 explains where that route works and where, as here, it does not.

Why no DTAA reduces the rate, and the double tax at home

NRIs who have learned that a Double Taxation Avoidance Agreement can cap Indian tax on dividends at 10% or 15% naturally assume a treaty will do the same for winnings. It does not, and this is one of the cleanest "no" answers in NRI taxation.

Gambling, lottery and game winnings do not have their own article in most of India's tax treaties. They fall into the residual "Other Income" article, and in the India treaties with the UK, UAE, USA, Canada, Singapore and Australia, the Other Income article generally allows the source country, India here, to tax such income, often without a reduced rate cap. There is no treaty number that brings 30% down to 15%. A Tax Residency Certificate and a Form 10F, which unlock treaty rates on interest or dividends, buy you nothing on a winning, because there is no lower treaty rate to unlock. Our DTAA mechanics, TRC and Form 10F guide explains where these documents do real work; this is simply not one of those places.

So the full 30% plus cess stands in India. And then the second tax arrives. Your country of residence taxes the same winning again under its own rules, because most countries tax their residents on worldwide income. The UK, the USA and Canada all bring foreign gambling and prize income into the resident's return, with their own quirks. The relief mechanism is a foreign tax credit in your home country for the Indian 30% already paid, but that credit is frequently partial, capped at the home country's own tax on that slice of income, and in some cases foreign gambling losses or income are treated under special rules that limit the credit further. The honest read is that an NRI's gaming or lottery winning is one of the few income types where you can genuinely end up taxed close to twice, with only imperfect relief, because India takes 30% off the top and your home country then assesses what it considers its share. Our DTAA relief for NRIs and foreign tax credit and Form 67 guides walk through how to claim what relief does exist.

The GST angle: 28% on the platform side, and the 2025 ban

This part does not land on your personal tax return, but it shapes the economics of every rupee you stake, so it belongs here as context. Since 1 October 2023, online real-money gaming, casinos and horse racing attract 28% GST on the full face value of the bet, stake or deposit, not on the platform's margin or your net winnings. The Supreme Court in 2026 upheld this and confirmed there is no distinction between a game of skill and a game of chance once real money and betting enter the picture, rejecting the industry's long-standing skill-game defence.

What this means for you as a player is that the platform's economics changed sharply: a meaningful slice of every deposit goes to GST before any contest is even played, which shrinks the prize pools you are competing for. The 28% GST is the platform's liability, not yours to file, but you pay it indirectly through worse odds and thinner pools. It stacks on top of, and is entirely separate from, the 30% income tax on whatever you do win.

Now the part that genuinely reshapes this whole topic. The Promotion and Regulation of Online Gaming Act, 2025, in force from 22 August 2025, bans online real-money gaming in India, including real-money fantasy sports and similar games. Where there is no monetary stake, there is no GST and, going forward, far less scope for taxable winnings from Indian platforms at all. So for an NRI, the practical picture splits in time: winnings credited before the ban, or under any grandfathered or disputed arrangements, remain fully taxable under the rules above and will surface in your AIS, while future real-money play on compliant Indian platforms is largely foreclosed. Offshore platforms that accept Indian players exist in a legal grey zone the Act is designed to shut down, and winnings routed through them carry both tax exposure and now regulatory risk. Lottery, game shows and offline gambling are untouched by the gaming ban and continue under 115BB and 194B exactly as before.

A worked example: Rs 10,00,000 of winnings versus Rs 10,00,000 of salary

Numbers make the flatness of this regime obvious. Take an NRI in Dubai, Priya, with no other Indian income in the year, and compare what happens to a Rs 10,00,000 online-game net winning against a Rs 10,00,000 Indian salary.

The online-game winning under Section 115BBJ:

• Net winnings (after Rule 133 netting of her own deposits): Rs 10,00,000
• Tax at flat 30%: Rs 3,00,000
• Add 4% health and education cess on Rs 3,00,000: Rs 12,000
• Total tax: Rs 3,12,000
• Deductions allowed: Rs 0
• Basic exemption set-off allowed: Rs 0
• TDS the platform already deducted under 194BA at 30% plus cess: Rs 3,12,000

Priya keeps Rs 6,88,000 of her Rs 10,00,000 winning, and because the TDS already equals her full liability, she has nothing further to pay in India, though she must still file ITR-2 to report it and reconcile the TDS. There is no refund to chase, because there was nothing to deduct that would have lowered the 30%.

The Rs 10,00,000 salary, for contrast:

Salary is taxed on the slab system, and an NRI gets the basic exemption and slab progression. Under the new regime slabs, a Rs 10,00,000 income attracts tax in the low single-lakh range after the exemption and the lower slabs apply, materially less than Rs 3,12,000, and salary also allows the standard deduction and various other set-offs that winnings forbid. The exact salary figure depends on the regime and year, but the structural point is what matters: the same Rs 10,00,000 is taxed far more heavily as a winning than as salary, because the winning is flat 30% from rupee one with nothing deductible, while salary climbs through exempt and lower-rate slabs first.

That contrast is the whole lesson. An NRI who mentally files a winning alongside their salary, expecting slabs and deductions, is off by roughly Rs 2,00,000 on these numbers. The winning is its own world, and that world charges 30% on the gross.

Edge cases

The general rules above cover most situations. These are the corners where NRIs get tripped up, and each one has caught a real client of mine.

Computing net winnings for online games across a year. Under Rule 133, the netting is cumulative and account-based, not contest-based. Suppose an NRI deposits Rs 2,00,000 into a gaming wallet over the year, has nil opening balance, and withdraws Rs 5,00,000. The net winning taxed is roughly the Rs 5,00,000 withdrawn minus the Rs 2,00,000 deposited, so Rs 3,00,000, taxed at 30%. The platform applies this at each withdrawal cumulatively so you are not taxed on returning your own stake. But note the year-end sweep: if money builds up in the wallet and is not withdrawn, the net winnings sitting there at 31 March are taxed anyway. You cannot defer the tax simply by leaving winnings parked in the wallet. Reconcile the platform's computation against your own deposit and withdrawal record, because errors in the netting flow straight through to over-withholding.

Prizes in kind: the car, the gold, the holiday. When a game show or lottery awards a non-cash prize, a car, jewellery, a holiday package, the tax is computed on the fair market value of the prize, and the 30% must still be paid. The payer is required either to recover the cash tax from the winner before releasing the prize, or to gross up and pay the tax so that the winner's tax on the market value is covered. Either way, an NRI who wins a Rs 20,00,000 car on an Indian game show faces roughly Rs 6,24,000 of tax on it (30% plus cess on the Rs 20,00,000 market value), payable in cash, with nothing about the car itself being deductible. People who have never budgeted cash to receive a "free" prize get a nasty surprise. If the value is disputed, the market value at the date of the award governs, and you will want documentation of it.

The home-country tax, again, because it is the one people forget. I will repeat it as an edge case because it is the single most common omission in an NRI's planning. The Indian 30% is not the end. A US-resident NRI reports the winning on the US return and may face additional US tax above the Indian credit; a UK-resident NRI brings it into the UK return; a Canadian-resident NRI into the Canadian return. The foreign tax credit for the Indian 30% softens but rarely eliminates the second tax, and some home-country regimes treat gambling income under rules that cap the credit. Model the combined tax, India plus home, before you assume a winning is worth what the platform shows.

Set-off is not allowed, and that includes the "obvious" cases. NRIs ask whether they can at least set a losing season against a winning season, or set platform fees against the prize, or set a gaming loss against their Indian rental income. The answer to all three is no. There is no inter-year carry-forward, no inter-game set-off beyond the single-wallet net computation, and no cross-head set-off. A Rs 4,00,000 win in April and a Rs 4,00,000 loss in November on the same kind of game leave you taxed on the Rs 4,00,000 win with the loss simply gone, unless both ran through the same online wallet within the same year such that Rule 133 nets them at the wallet level. For lottery and 115BB winnings, there is no netting at all.

Sub-threshold lottery prizes are still taxable. Because the Rs 10,000 under 194B is a withholding floor, a string of small prizes that individually escaped TDS still has to be declared and taxed at 30% in your return. The department sees these in your AIS even without TDS. Do not treat "no TDS" as "no tax."

The closing read

The honest read on an NRI's winnings is that this is the least forgiving income in the Act, and the reason is that every relief you rely on elsewhere is deliberately switched off. The rate is a flat 30% plus 4% cess, the same for you as for a resident, under Section 115BBJ for online-game net winnings and Section 115BB for lottery, game shows, betting and crosswords. Nothing is deductible, your basic exemption does not touch it, your losses vanish, and no treaty brings the rate down. The platform takes its cut at source under Section 194BA (no threshold) or Section 194B (above Rs 10,000), so on a Rs 10,00,000 win you keep about Rs 6,88,000 before your home country has even looked at it.

For most NRIs, three actions follow. First, make sure your PAN is live and mapped before you ever play or claim a prize on an Indian platform, because a PAN failure makes a bad rate worse. Second, file ITR-2 and reconcile the TDS even when the withholding already equals your liability, because sub-threshold prizes, surcharge errors and AIS mismatches only get resolved through the return. Third, and most importantly, model the home-country tax before you celebrate, because the Indian 30% is the first bite, not the last. And going forward, take the 2025 online-gaming ban seriously: real-money play on Indian platforms is now largely foreclosed, and chasing it through offshore sites adds regulatory risk to an already brutal tax. If your winning is from a lottery or game show, those continue exactly as before, and the 30% is not negotiable. The cleanest financial decision here is usually the one made before you stake the money, not after you win.

Related guides

• ITR filing for NRIs, AY 2026-27
• Crypto and VDA tax for NRIs
• TDS for NRIs and how to claim refunds
• DTAA relief for NRIs
• DTAA mechanics, TRC and Form 10F
• Foreign tax credit and Form 67
• Form 26AS and AIS for NRIs
• PAN for NRIs
• Lower-TDS certificate, Form 13
• NRI self-assessment tax and challan
• Advance tax for NRIs
• Responding to NRI tax notices
• NRI residency and RNOR rules
• NRI tax calendar 2026: key dates

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This guide is general information for NRIs, not personal tax advice. The taxation of winnings under Sections 115BB, 115BBJ, 194B, 194BA and 195, the GST treatment of gaming platforms, and the Promotion and Regulation of Online Gaming Act, 2025, are evolving and fact-specific, and your home country's treatment of the same income depends on its own law and the relevant treaty. Rates and thresholds are stated for AY 2026-27 and may change. Confirm your position with a qualified chartered accountant and a tax adviser in your country of residence before acting.