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New Tax Charges for Online Gaming

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Online gaming has become a new source of earning money while sitting in the comfort of our homes. The craze for online gaming and earning through it started mostly during the COVID-19 pandemic when everyone was confined to their homes.

There is a huge scope of career and employment opportunities in this field in the upcoming years. This exponential growth has not only attracted individuals but also big companies to invest in this sector.

At present, a 10% Tax Deduction Source (TDS) on online gaming but the Chairperson of the Central Board of Direct Taxes (CBDT) Nitin Gupta says that the next fiscal year will have a few tweaks in the TDS provision for online gaming to keep a check on tax-evasion.

Gupta says, “With online gaming coming into the limelight in the last few years, the tax department is working to see how a better audit trail can be established for money spent and earned through these online activities.”

“Online gaming is the new kid on the block and CBDT will take a view at the stage of budget preparation and see how evasion can be controlled, and at the same time make it easier to maintain the accounts and pay the taxes”, the chairperson adds.

A group of ministers is considering a proposal to segregate the amount collected by online gaming portals into two accounts – service and escrow.

Under this proposal, the service account should attract a GST rate of 28%, while the escrow account could attract a tax deducted at the source (TDS) of 30% under the direct tax rules.

The online gaming industry has countered this proposal by saying that the group of ministers should consider keeping their earlier 28% on the entire earnings from the online gaming industry.

There’s a lot of contemplation around this decision and as of now there is no definitive conclusion.

News Desk of Career Ahead Magazine. Latest education, career, business, startups & entrepreneurial news, announcements & PR releases.

Content Writer at Career Ahead Magazine

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