In the current fiscal year, the Center has gathered more than INR 700 Cr in Tax Deducted at Source (TDS) from online gaming winners and bitcoin transactions.
Nitin Gupta, the chairman of the Central Board of Direct Taxes (CBDT), was quoted by the news agency PTI as claiming that the government had recorded TDS from online gaming of nearly INR 600 Cr.
In addition, TDS on bitcoin transactions raised an additional INR 105 Cr.
The Finance Bill 2023 earlier this year added two new sections: 115BBJ for the calculation of taxes for people who receive income from winnings from online games and 194BA for TDS on winnings from online games for online intermediaries.
The new regulations mandate a 30% TDS on the yearly earnings of online gaming.
The user account will include any account the user has registered with an online gambling intermediary where any taxable deposit, non-taxable deposit, or winnings of the user are credited and withdrawals by the user are debited, as per the rules, in the case of numerous wallets under one user.
For the purpose of determining net winnings and deposit, withdrawal, or balance, each user account will be taken into account.
A player’s net wins are determined by deducting the amount withdrawn during the year from the total of all deposits made during the fiscal year and the opening balance in the user account at the beginning of the fiscal year.
The CBDT has also established a threshold of INR 100 for the deduction of tax from wins from online gambling.
On the other side, beginning on July 1, 2022, crypto transactions above INR 10,000 will be subject to 1% TDS under section 194S of the Income Tax Act.
The industry feared that a change in TDS laws would have a significant effect on user bases for both gaming and cryptocurrency TDS. Numerous cryptocurrency firms have stopped operating in recent months, claiming regulatory uncertainty and unfavorable market conditions, including Pillow, Flint Money, and WeTrade.
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