Dream11 winner tax: Mangal Prasad, a resident of Ghasi Ram Purva village in Kaushambi district of Uttar Pradesh, has become a topic of discussion on social media. Mangal, 30, working in an ordinary plywood factory, won Rs 4 crore with an entry of just ₹ 39 on the Dream11 fantasy sports platform. He held this bet during the IPL match of Punjab Kings and Chennai Super Kings held on 29 April.
But Mars will not get a full 4 crore rupees in hand. Under India’s tax laws, there is a huge tax deduction on such rewards. This reduces the real amount of Mars to ₹ 2.44 crore.
Why will you get only ₹ 2.44 crore?
The amount won on Dream11 is considered as ‘Income from Other sources’ from ‘other sources’ under Section 56 (2) (IB) of the Income Tax Act, 1961. Let us understand how tax calculation occurs on this?
- amount won: ₹ 4,00,00,000
- Flat Tax Rate: 30% (under Section 115BB)
- Total effective tax mixed with surcharge and cess: About 39%
- TDS cut by Dream11 (under Section 194B): ₹ 1.56 crore
- Mars received the total amount: ₹ 2.44 Crore
If the winning amount on Dream11 is more than ₹ 10,000, the platform releases the amount by deducting TDS.
What will Mars have to do in the case of tax?
Although TDS has already been cut, Mars will have to complete some necessary tax compliance, so that they do not face any further trouble.
- Income of your entire ₹ 4 crore will have to be shown in the Income Tax Return (ITR) of the financial year.
- The TDS entry in Form 26AS will have to be confirmed.
- There will be no difference between the tax credits shown in the tax deducted by Dream11 and Form 26AS.
GST has also repaid Mars
Not only income tax, the government has also got a share on Mars’s entry of ₹ 39. Out of this amount, Dream11 deducted ₹ 9.92 GST, which they have to deposit to the government. Fantasy Games in India takes 28% GST, which is charged while playing the platform.
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