Online Gaming News: Do you know how much tax has to be paid on winning money on online gaming apps? The earnings from online gaming platforms have now come under the radar of the Income Tax Department, which has come into effect from July 1, 2023. CBDT has issued a guideline in this regard, in which TDS will have to be paid on earnings of Rs 100 or more through online gaming.
If there is income from bonus, referral bonus or any kind of incentive in online gaming, then it will also be counted as taxable amount and TDS will have to be paid. In such a situation, if you have won 200 by investing 150 rupees, then you will not have to pay any tax. But if you win 250 rupees by investing 150 rupees, then you will have to pay 28 percent of the winning amount for it. Suppose if you have won 100 rupees, then only 72 rupees will come in your account.
According to CBDT guidelines, if a player wins less than Rs 100 in online gaming, then the online gaming platform will not be required to deduct TDS. According to this circular, if bonus, referral bonus, incentive is given from an online gaming company, then as per the Income Tax law, it will also be added to the taxable income deposit. Some deposits may be in the form of coins, coupons, vouchers and counters and will be treated as taxable deposits.
This is the new guideline
CBDT has said in its Rule 133 that no matter under what name the user account is registered with the online gaming company, if any taxable deposit, non-taxable deposit, if the winning amount is credited or withdrawal is debited, the rule will be applicable on it. If a user has multiple accounts, then each of his accounts will be calculated for the net winning amount. Deposits, withdrawals or balances present in the user account will all come under this purview.
This is what the Finance Minister said
It is noteworthy that Sitharaman clarified that tax will be imposed on online gaming whether the game is based on skill or luck.
He informed, “We will still align with the rules proposed by the Ministry of Electronics and Information Technology (MeitY). An amendment will be made to Schedule III of the GST Act by including online gaming in the actionable claim list. Item No. 6 in the list Already included are betting, gambling and lotteries. We will also include online gaming and horse racing, as a result, they will be taxed at 28 percent on full face value.
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