The Government of India has proposed a new law under the Income Tax Act to define online gambling and impose a 30% tax on net winnings from online gambling. The proposals were made in the Finance Bill 2023, which was introduced on Wednesday after Finance Minister Nirmala Sitharaman presented the budget.
The proposal to impose a 30% income tax on net winnings from online gambling and defining gambling was made in Article 115BBJ, which was added to the Finance Act and will come into force on 1 April 2024.
“For the purposes of this section, online game shall have the meaning assigned to it in clause (iii) of the Explanation to section 115BBJ,” according to the Finance Bill 2023.
The Bill also added another section called Section 194BA which empowers the Securities and Exchange Board of India (SEBI) to formulate rules for the calculation of income tax deductions at the time of deduction of net winnings in online games. It will start on July 1.
Sitharaman in his budget speech also suggested removing the minimum threshold of ?10,000 for levying TDS on online gambling winnings. This means that TDS will be charged even if the winnings are less than ? 10,000. Before the budget was announced, sections of the sports industry had urged the government not to remove the threshold.
The gambling industry has adopted a new category in online gambling as it differentiates itself from online gambling.
"We are pleased to note that the Bill distinguishes between betting and sports betting and online gaming, by introducing a new section 194BA that taxes the user from online gaming. at the end of the year ," said Roland Landers. , CEO, All India Gaming Federation (AGIF).
The online gambling industry in India has said that the games offered in real gambling and fantasy sports like MPL and Dream11 are games of skill and recognized by various High Courts. They urged the government to ban offshore betting. In December, the Ministry of Information and Broadcasting (I & B) asked Google to prevent the display of surrogate advertising from foreign betting companies such as Fairplay, PariMatch, Betway and 1xBet in search results on Youtube.
Last month, the Ministry of Electronics and Information Technology (MeitY), which became the nodal agency to regulate online gambling on December 23, proposed to keep the online gambling system in the IT Act (Intermediary Guidelines and Digital Media Ethics Code), 2021, which governs social media.
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