Finance Minister Nirmala Sitharaman in the Union Budget 2023-24 proposed to impose a 30% tax on the net winnings from online gaming. The minister also proposed to remove the threshold of Rs 10,000 for tax deduction at source (TDS). Now, these changes have come into effect from April 1. This means that you will have to pay taxes on the earnings you make from playing online games. These proposed amendments in the Finance Bill have been approved by both houses of parliament.
Here’s what the players should know:
As of now, the TDS was deducted only when it exceeded the threshold of Rs. 10,000. But, under the Financial Bill 2023 there will be no such parameters. TDS will be deducted from every amount the gamer wins online.
As per the new amendments made in the law, the gaming companies will levy a 30% TDS on any earnings the customers choose to withdraw.
The budget seeks to introduce a withholding tax on entire net winnings of any such use of online gaming platforms. Following this, the gaming industry would need to revamp its strategy as these provisions along with ongoing discussions in the GST Council could impact the user psyche.
In case the amount is not withdrawn by the user, tax shall be deducted at the source at the end of the financial year.
Revenue Secretary Sanjay Malhotra told the reporters that the tax would be on net winnings on the aggregate value.
Two new sections have been proposed with respect to online gaming Section 115BBJ to tax such proceeds at 30 per cent and Section 194BA providing TDS on net winnings at the end of the financial year.
The Financial Bill 2023 gives the onus to the gaming platform to ensure that the taxes are paid by the users on the entire net winnings.
With these changes coming in, the online gaming industry aims to transition seamlessly to the new TDS regime. These amendments will also enable the industry to streamline tax compliance as well as educate close to 200 million gamers on the new regime.
Read all the Latest Business News here
Comments
0 comment