Present Position
At present, income by way of winnings from any lottery or
crossword puzzle or card game and "other games of any
sort" are subjected to income tax @ 30% under Section
115BB of the Income-tax Act, 1961 ("the Act"), and tax
deduction at source ("TDS") under Section 194B of the Act
at the rate of 30%, if the amount exceeds INR 10,000.
Budget Proposal
As one of the measures for "rationalization and
simplification", the Hon'ble Finance Minister in the
Union Budget 2023 has announced the proposal on "removing
the minimum threshold of ` 10,000/- for TDS and clarifying
taxability relating to online gaming".
The Finance Bill, 2023 seeks to insert a new section 115BBJ in
the Act relating to tax on winnings from online games. The proposed
section seeks to levy income tax on "net winnings from
online games", computed in the manner as may be provided
by rules, at the rate of 30%. The term "online
game" has been defined as "a game that is
offered on the
