TDS on online gaming applications to be effective from April 1
This comes as the online gaming industry stakeholders had approached the Central Board of Direct Taxes (CBDT) and the Prime Minister’s Office (PMO) to oppose changes in TDS and Goods and Service Tax (GST) on the sector.
The TDS or tax deducted at source on online gaming applications will now be effective from April 1 as against an earlier provision of July 1 as reported by Mint.
This comes as the online gaming industry stakeholders approached the Central Board of Direct Taxes (CBDT) and the Prime Minister’s Office (PMO) to oppose changes in TDS and Goods and Service Tax (GST) on the sector.
Online gaming firms are required to impose a 30% TDS on any winnings users withdraw on their apps in the excess of Rs 10,000. As of April 1, the threshold will remain but the TDS will be applicable on a user's earnings annually.
Imposing a high slab of GST would prematurely stifle the sector, Saumya Singh Rathore, co-Founder of Delhi-based Winzo Games told Mint. Imposing tax rates could also have a ripple effect on a company's ability to survive as well as creators within the sector, she notes.
At the moment, gaming companies are liable to pay 18% GST on gross revenue.
On 23 February, three online gaming industry bodies, including E-Gaming Federation (EGF), All India Gaming Federation (AIGF) and Federation of Indian Fantasy Sports (FIFS), wrote to the CBDT to reconsider the changes in TDS regime, which take effect on 1 April, Mint had earlier reported.
Edited by Akanksha Sarma