ITAT Bengaluru backs net-profit tax treatment in Gameskraft player’s ₹2.33 crore winnings case
The tribunal reportedly overturned a tax demand on a player using Gameskraft platforms, finding that real-money online gaming income should be assessed on net profit rather than gross wallet winnings. The case cited ₹2.33 crore in gross winnings against ₹2.61 crore in buy-ins, resulting in a net loss.
What happened
Gameskraft Technologies Pvt. Ltd. · ITAT Bengaluru overturned a tax demand on a Gameskraft-platform player, holding that online real-money gaming should be
Key facts
- ₹2.33 crore gross online gaming winnings
- ₹2.61 crore total buy-in
- ₹27.99 lakh net loss
- ₹4.32 lakh reported income
- 10% gaming commission
- AY 2022-23
- March 15, 2022
- July 23, 2026
Why this matters
Gaming platforms may gain a stronger tax-policy narrative for user acquisition and partnerships, but should avoid assuming nationwide precedent until the ruling’s legal reach is clearer.
What to watch
- Whether the Income Tax Department appeals the ITAT Bengaluru ruling and obtains a stay or contrary High Court decision.
- CBDT clarification on deduction of entry fees/buy-ins, treatment of losses, and interaction with section 194BA TDS rules.
- Additional ITAT or High Court decisions involving online gaming wallet credits and annual netting of winnings against stakes.
- Changes in platform reporting formats, player tax certificates, or dispute volumes following the ruling.
- Any policy linkage between income-tax treatment and the separate 28% GST regime on online gaming deposits.
- Gameskraft and peers may provide clearer annual net-win, buy-in, withdrawal, and TDS statements to support player tax filings.
- Gaming operators may use the order in representations seeking standardized netting rules across income tax, TDS, and reporting requirements.
- Tax advisors may encourage affected players to contest gross-winnings assessments where documented buy-ins exceed winnings.
- Platforms may increase audit trails and wallet segregation to prove that recycled deposits and stakes are not income.