The 30-year-old reportedly scored big on the fantasy sports platform Dream11, winning a staggering ₹4 crore after paying a mere ₹39 entry fee during the IPL match between Punjab Kings and Chennai Super Kings on April 29.
While Mangal’s good fortune is a cause for celebration for him and his near ones, the 30-year-old won’t be taking home the full ₹4 crore prize. Under India’s tax laws, winnings from such platforms are subject to tax deductions, with a significant share of his prize money being paid to the government.
Why will Mangal get only ₹2.44 crore?
Dream11 winnings are classified as “Income from Other Sources” under Section 56(2)(ib) of the Income Tax Act, 1961.
Here’s how the math works:
- Winning Amount: ₹4,00,00,000
- Tax Rate: 30% flat under Section 115BB
- Surcharge and Cess: Brings the total effective tax to around 39%
- TDS Deducted by Dream11: ₹1.56 crore under Section 194B
Net Payout to Winner: ₹2.44 crore
Dream11 is legally bound to deduct tax at source (TDS) before releasing the winnings if the prize exceeds ₹10,000, which is clearly the case here.
What does Mangal need to do next in terms of tax compliance?
Even though TDS has already been deducted, Mangal now needs to follow some mandatory tax compliance. This includes:
- File his income tax return (ITR) for the financial year, reporting the full ₹4 crore as income.
- Verify TDS in Form 26AS, which reflects taxes paid on his behalf.
- Ensure no mismatch between the tax credit statement and Dream11’s deduction.
From ₹39 to Crorepati
While Mangal’s story has inspired many, it also serves as a reminder that large financial gains come with significant tax responsibilities. For fantasy sports players and aspiring winners, understanding how such winnings are taxed is crucial.
Despite the hefty tax bite, Mangal’s ₹2.44 crore net gain remains life-changing, and his story continues to be a beacon of possibility for many across India.
Not just income tax, Mangal has also paid a 28% GST on the entering betting value. So this ₹39 that he entered with on the betting, Dream 11 deducted ₹9.92 and has to submit to the GST authorities as the GST dues, which was charged from the amount Mangal played the bet with.
(Edited by : Ajay Vaishnav)
