February 5, 2023

Budget 2023: Finance Minister may announce major changes in tax rules for online gaming Budget expectations The online gaming sector may see this announcement

Budget 2023: The online gaming sector is one of the fastest growing sectors in India. With the advent of 5G technology in 2023, the expansion of next-gen gaming technology will further accelerate.

The online gaming sector is one of the fastest growing sectors in India.

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The online gaming sector is one of the fastest growing sectors in India. With the advent of 5G technology in 2023, the expansion of next-gen gaming technology will further accelerate. With 15 billion downloads in 2022, India has the largest consumer base for mobile games in the world According to a Lumikai report, the industry generated revenue of $2.6 billion in FY 2021-22 and it may cross $8.6 billion by FY 2026-27.

Budget In 2022, the Animation, Visual Effects, Gaming and Comic (AVGC) Promotion Task Force was announced. Now on February 1, Finance Minister Nirmala Sitharaman is going to present the budget for the financial year 2023-24.

Today’s big news

What announcements can be made for the online gaming sector? Let’s have a look.

Taxation for the Online Gaming Sector

Progressive taxation should be adopted based on the best international practices recommended by the AVGC report. Better income tax rules should be implemented for this. Britain and France have made good changes to attract online gaming operators. Previous online gaming operators had moved elsewhere due to outdated income tax systems in these countries. Changes in tax rules have helped the UK economy attract gaming operators.

Increase in Tax Deduction (TDS) limit on prize money

Central Board of Direct Taxes (CBDT) Chairman Nitin Gupta said that Budget 2023 will bring some changes in TDS provisions for online gaming, so as to control tax evasion. There are two main parts to the tax provisions under the Income Tax Act, 1961 for the online gaming sector.

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Firstly, the prizes received from online games will be treated as income of the players and as per the current income tax rules on them, the players will be treated as income from other sources. Secondly, online gaming companies will have to deduct tax at the rate of 30 percent on prizes, which exceed the limit of Rs 10,000 per game. It is now being considered to increase the TDS limit for the sector.

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