Tax Laws And Liability For Online Poker Websites In India

Tax Laws And Liability For Online Poker Websites In IndiaOnline poker industry in India is passing through a stage of transformation. The online poker website owners and entrepreneurs are still considering the legality of playing online poker and opening online poker websites in India. Even the liability of websites developers and managers of online poker websites has been outlined in India.

Nevertheless, the online poker websites in India are heading towards legal troubles as they are not complying with Indian laws. Use of Bitcoins by online poker websites and other stakeholders has further raised the legal bars. When even the Bitcoin exchanges of India are under regulatory scanner, individual online poker websites experiment with Bitcoins is really risky. Even Apple has removed Blockchain application from its app store to ensure compliances with laws of different jurisdictions, including India. Appleā€™s plan to launch mobile payment service through touch ID must also be judged on similar considerations.

As more and more foreign companies aim at exploring Indian markets, they have started paying attention to Indian laws. Indian courts are presently analysing whether Google is liable to pay tax in India or not? The issues pertaining to income tax liability of websites like Google, Facebook, Twitter, etc would also arise in India in near future. The online poker websites and their players are also required to comply with Indian income tax and other tax related laws.

For the purposes of computing taxes under Indian laws, there is no difference between a legal and an illegal income. Thus even illegal betting and gambling winnings would be liable to be taxed under Indian laws. The distinction of skills versus change is irrelevant to decide the liability if tax under Indian laws. Depending on the Double Tax Avoidance Agreement (DTAA) between India and other countries, some activities may be exempt from double taxation. However since gambling does not figure in the DTAA, it may be taxed in many countries.

Thus, not only the online poker websites must be legally running in India but they must also be in strict compliance with Indian income tax laws. The Income Tax Act, 1961, Foreign Exchange Management Act (FEMA) 1999, Anti Money Laundering Law, Information Technology Act, 2000, Indian Gambling Act, etc would collectively govern the legal liability of online poker websites in India.

Ignoring the internet intermediary liability and cyber law due diligence (PDF) by online poker entrepreneurs in India can be legally fatal. There only one or two online poker websites in India that are complying with these legal requirements. The online poker websites are also required to ensure that their payment gateways are duly approved by the Reserve Bank of India (RBI). Cyber due diligence for Paypal and online payment transferors in India must also be ensured. How many online poker websites are following these regulatory requirements is still to be tested by various authorities of India.