By Our Correspondent /Agencies
NEW DELHI: In early February 2022, Finance Minister Nirmala Sitharaman announced a tax of 30% on any income earned from cryptocurrencies. This is similar to the amount currently placed on winnings received from gambling. The announcement was made as part of the government’s 2022 Budget speech.
Crypto and gambling have historically been considered legal grey areas in India, often regulated by outdated laws. Any official move to recognise and tax these practises is a step in the right direction.
Both gains made from gambling and cryptocurrencies are taxed under the “income from other sources” umbrella.
For gambling, the deduction is only made on winnings exceeding ₹10,000, and should be calculated and paid for by the gambling site. Winnings above ₹10 lakhs are subject to a further 10% surcharge. So, if you were to win a jackpot at an online lottery in India, it should be the responsibility of the lotto site to pay the tax on your behalf.
But since this isn’t always the case, especially when it comes to offshore gambling sites, it is important that Indian casino players report their winnings manually.
How taxation benefits you
Gambling in India is regulated by the Public Gambling Act of 1867. It should come as no surprise that there is no mention of online gambling or cryptocurrencies in the act.
Each state in the country is free to set their own gambling laws. Some have decided to ban it altogether; including rules against online betting, while others have chosen to go the route of regulation.
Back in 2021, the Reserve Bank of India (RBI) intended an outright ban on the use of cryptocurrencies. As an alternative regulating cryptocurrencies and online gambling is the ideal step forward for fans of gambling.
This comes with the cost of taxation, but that’s also not all bad. Taxation on both comes with the benefit of a boost to local economies, with funds being redirected to important social causes.
Regulation will also create more job opportunities in states where online gambling has been allowed. It is estimated that close to 100,000 employment opportunities could be created if the industry is officially regulated.
The road ahead
The future of online gambling and cryptocurrencies in India currently hangs in the balance. Regulation and taxation might not seem beneficial to you, but it is a step in the right direction.
Cryptocurrencies will only be taxed as income, and not at the point of sale. So, you will only be taxed if and when you sell the cryptocurrency and make a profit on it.
Along with the announcement of a future tax on cryptocurrency gains, Finance Minister Sitharaman also revealed that the Reserve Bank of India plans to introduce a digital currency later this year.
A regulated gambling market could open new economic possibilities, improving unemployment rates and even boosting the local tourism market. States that allow for brick-and-mortar casinos, have seen an increase in tourism, as players flock from near and far to try their luck. This in turn leads to investment in infrastructure. It’s really a win-win situation.
