Earlier last month, the gaming industry in India had appealed to the Central Board of Direct Taxes (CBDT) about the new TDS regime. Online gaming bodies in India like the E-Gaming Federation (EGF), Federation of Indian Fantasy Sports (FIFS), and All India Gaming Federation (AIGF) had presented a joint letter to the CBDT for reconsideration of the regime.
The federal government, on March 24th, decided to pass the Finance Bill 2023 with the necessary amendments, that was considerate of the concerns raised by the gaming bodies. With this, the new TDS regime will be implemented from April 1st, 2023 which will save the gaming companies a lot of hassle.
What the Gaming Companies were Concerned About
In their letter, the gaming bodies had put forward their concerns about the newly introduced section 194BA to the Income Tax Act. This section was meant for winnings from online games (apart from gambling and betting). At the same time, the section 194B was amended and it covered winnings “from gambling or betting of any form or nature whatsoever.”
The section 194BA was originally scheduled to be implemented from July 1st, and the amended section 194B would be applicable from April 1st. This meant that the gaming companies will have to adjust to two significant regulatory changes within a short span of 3 months. This might have a negative impact on the smaller companies and create ambiguity while filing taxes.
The gaming bodies were quick to act and requested the government to change the implementation date of one of the sections.
In response, the central government has decided to implement the new TDS regime, section 194BA on April 1st, together with the amended section 194B.
Joy Bhattacharjya, the Director General of Federation of Indian Fantasy Sports (FIFS), commented, “We are grateful to the Government for accepting the industry’s appeal & ensuring a smooth transition to the new TDS regime for Online Gaming in the Finance Bill 2023. We also look forward to engaging with the Government on the rules for computation of net winnings and are hopeful that industry inputs will be given a favorable consideration.”
As per the new TDS regime, tax would be deducted at source from rewards that come from online gaming. Earlier, TDS would be deducted only if the winnings exceeded 10,000 INR.
You may also like –
- The Aviator game gains popularity in India
- Scientific Games Unveils Game of Thrones Lottery Games
- Indian Govt. Might Impose 28% GST on Online Gambling
- New GambleAware Study Shows Harm Caused by Early Exposure to Gambling
- Evoplay Unveils ‘Penalty Shoot-Out: Street’ – A Soccer-Themed Game