Tax sword on those who earn money from online games like Dream11 and Mycircle11, heavy TDS will be deducted, new rules apply
The entry fee will not be added to the winning amount.
With this decision, the government hopes to stop tax evasion.
Online gaming in India can be worth $5 billion in 2 years.
TDS Online Gaming: If you earn money through other gaming websites like Dream11, Rummy Circle or Mycircle11, then from today your profits will take a big hit. The government had made a provision in this budget (Budget 2023) that from April 1, 30 percent TDS would be deducted on every income from online gaming. Earlier, the same TDS was applicable only on winnings above Rs 10,000. However, henceforth TDS will be deducted on the amount won from the game.
The intention of the government behind this is to stop tax evasion. However, it is going to be heavy on the pockets of those earning money through online gaming. Talking about earlier, now a person used to pay an entry fee of Rs 1000 in a game and win Rs 12000, then on Rs 11,000 his TDS was 30%. Accordingly, he had to pay TDS of Rs 3,300 on his winnings of Rs 11,000.
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What will happen now
Now if A enters the game by paying an entry fee of Rs 1000 and wins Rs 8000, he will have to pay TDS on Rs 7,000. Entry fee is not being considered as part of the winnings. That’s why the government will exclude the entry fee from the calculation. If you win Rs 7000 then you will have to pay Rs 2100 as TDS.
Companies were keeping the winning amount low
After this provision was introduced in the budget, Revenue Secretary Sanjay Malhotra had said that some companies were deliberately keeping the winning amount below Rs 10,000 to avoid paying TDS. However, the opinion of experts about this is somewhat negative. He says that other methods can be used to stop tax evasion. Kriti Singh, Chief of Staff of The Dialogue, says that this will allow people to use unauthorized routes to play the game. Experts also believe that this will push the boom of online gaming in the country.
Business will be 5 billion dollars
Online gaming is growing rapidly in India. India had the largest consumer base of mobile games in the world with 15 billion downloads in 3022. With the arrival of 5G, online gaming is expected to accelerate further in the country. By 2025, this industry is expected to grow to $5 billion.
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Tags: business news, income tax, online games, TDS
FIRST PUBLISHED : April 01, 2023, 15:17 IST