BENGALURU: The Union government will remove the minimum threshold of Rs 10,000 for TDS relating to online gaming. During her speech, Finance Minister Nirmala Sitharaman spoke about removing the minimum threshold of Rs 10,000 for TDS .
“Income from online gaming is considered as ‘income from other sources’ as per Section 115BB of the Income Tax Act. As per earlier provisions, if prize money exceeds Rs 10,000 then entity is required to deduct TDS at 30 per cent plus surcharge and cess before giving money to the beneficiary,” said Amit Jindal, co-founder, Felix Advisory.
The beneficiary is required to show this amount when filing Income Tax Return and non-reporting can lead to penalty of upto 200 per cent of the tax amount. As per proposed Finance Bill 2023, with effect from July 1, 2023, the government has tightened the framework for TDS by removing the threshold limit of Rs 10,000 to regulate the flow of money spent and winning in the online gaming sector, he added.
Many new age gaming start-ups have been launched in the last few years and at present 18 per cent tax is being levied on commissions collected by these online platforms for games.