Budget 2023-24 proposed the introduction of two new provisions for TDS for online games. 30% taxation on net winnings payments for the fiscal year and removal of the current threshold of Rs 10,000 for taxation of TDS.
In addition, taxes will be withheld at the end of the fiscal year if the amount is not debited from your user account.
At a post-budget press conference, Revenue Secretary Sanjay Malhotra said the tax would apply to gross value net winnings. “If you withdraw money from the winning cumulative pool, you will be subject to withholding tax,” he said.
Vikash Sureka, Chief Financial Officer of online gaming unicorn Mobile Premier League, said:
A finance bill proposal allows the TDS to be calculated at the end of the fiscal year or at withdrawal. Sureka said the change would give users who play multiple games the option to pay taxes at the end of the year based on their net winnings, eliminating the need to pay taxes on notional credits.
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“For companies, the TDS calculation process will be simpler and more compliant. This positive step for the skill games industry counts on the government’s continued support and guidance,” he added. rice field.
In an explanatory memo to the finance bill, the government said: This is against the will of the legislature.”
Regarding the removal of thresholds, Games24x7 Chief Financial Officer Rahul Tewari said: This has led to the recognition of online gaming as a technology-driven entertainment sector. As mentioned above, we will wait for more clarity from the department on the calculation mechanism. ”
