income tax
On February 15, 2022, the Income Tax Department launched a major search and seizure operation on a business group engaged in multi-state online gaming and betting, specifically cricket betting. This massive operation, with 29 sites in cities like Mumbai, Delhi, Surat, Jaipur, Pune, and Kolkata, revealed one of India's biggest illegal betting syndicates.
The syndicate carried on secret work, concealing its true extent and earnings from official control.
Most of the group's income was in cash, gathered by a far-reaching web of agents and local managers in several cities.
Officials seized a variety of materials, such as:
The syndicate used elaborate methods to cover up unaccounted cash, posing it as unsecured loans, security premiums, partner capital, agricultural earnings, share deals, commissions, and trading profits. This money was routed through several layers of hawala channels and shell companies.
The laundered money was invested mainly in real estate and the securities market, with provisional attachments on listed securities worth over ₹550 crore.
Initial probes pointed towards a cash turnover of over ₹600 crore in only six months.
Assets valued at ₹3.08 crore in cash (foreign currencies) and jewellery worth ₹81 lakh were seized by the authorities. Thirty bank accounts were also provisionally attached.
This raid marks the government's intensified attempts to fight illegal online gambling and betting, particularly after the imposition of a 28% GST on all online betting sites in late 2023.
The Directorate General of GST Intelligence (DGGI) and the Ministry of Electronics and Information Technology (MeitY) have been given the powers to:
Unauthorized betting and gambling will be considered criminal offenses under Section 112(1) of the Bharatiya Nyaya Sanhita, 2023, which will come into force in July 2024.
All online gaming winnings above ₹10,000 are taxed at 30% with no rebates under CBDT rules.
The syndicate's use of shell companies, hawala operators, and online platforms speaks to the changing sophistication of financial wrongdoing in India's online gambling industry.
The crackdown reflects a wider government effort to increase transparency, avert tax evasion, and promote compliance in the fast-growing online gaming industry.
Q1: What scale of black money was uncovered during the raid? A: The raid uncovered more than ₹600 crore in cash turnover in mere six months, along with hundreds of crores worth of assets provisionally seized.
Q2: How did the syndicate wash away its unaccounted income? A: The syndicate washed away money by investing cash in shell companies and hawala networks, presenting it as genuine business earnings.
**Q3: What are the legal punishments for illegal internet gambling in India? A: Offenders can be prosecuted under the Income Tax Act and GST Acts. Also, from July 2024, they can be charged criminally under the Bharatiya Nyaya Sanhita, 2023.
Q4: What measures is the government implementing for regulating online betting and gaming? A: The government has imposed a 28% GST on online betting, authorized DGGI and MeitY to block illegal websites, and criminalized unlawful betting operations.
The Income Tax Department raid on a multi-state betting and gaming syndicate based online has revealed an enormous extent of tax evasion as well as money laundering in India's growing online gambling industry. Over ₹600 crore of black money has been found and several assets have been attached provisionally in this case, which is a turning point in the government's battle against illegal online gaming and betting operations.