New Delhi, Sept. 6 -- The Income Appellate Tribunal (ITAT), Bengaluru, has ruled that taxation of online real-money gaming winnings should be based on actual net winnings rather than gross amounts credited to a player's gaming wallet.

The ruling came in the case of a Bengaluru-based gamer who had put more than Rs.2 crore into online rummy and poker but ultimately suffered a net loss of nearly Rs.28 lakh.

The taxpayer had filed his income tax return (ITR) declaring total income of Rs.4.32 lakh from sources including rental income, business income and income from other sources.

During scrutiny of the return, the Income Tax Assessing Officer (AO), Bengaluru, received information that the taxpayer had participated in online games through t...