BENGALURU: The online gaming industry has welcomed the Union Budget, especially in relation to the rationalisation of direct taxation for online gaming. In the budget 2023-24, Finance Minister Nirmala Sitharaman announced the removal of the minimum threshold for TDS and clarified taxability relating to online gaming.
“For lottery, crossword puzzles games etc., the threshold limit of Rs 10,000 for TDS will continue, but will apply to aggregate winnings during a financial year,” Sitharaman added.
On winnings from online gaming, TDS is applicable in accordance with current income tax legislation. Additionally, while filing an income tax return, winnings must be declared under “income from other sources (ITR)”.
Sitharaman added that the government will issue more clarity on the taxation regime for online gaming. “Major measures in terms of easing the taxation burden include clarifying taxability related to online gaming,” Sitharaman said.
Welcoming the budget announcement, All India Gaming Federation (AIGF) CEO Roland Landers said the online gaming industry “welcomes the budget announcement by the Finance Minister, particularly in relation to the rationalisation of direct taxation for online gaming. We are further happy to note that the Finance Bill has carved out the distinction between betting and gambling activities and online games, by introducing a new section 194BA, which takes a user’s net winnings from online games at the end of the financial year,” said Landers.
“As the Indian gaming market is expected to grow at a 27% CAGR reaching USD 8.6 billion by 2027, government support will further help to streamline the industry and provide structured growth to this burgeoning industry,” said CEO & Founder, of Witzeal Technologies, Ankur Singh.
According to the Lumikai Gaming Report 2021-22, India’s online gaming industry stood at USD 2.6 billion in 2022 with over 50.7 crore gamers, of which almost one-fourth were paying users. It is projected to reach USD 8.6 billion in FY27.