Online Gaming: Proposed Changes In Tax Law

The Finance Bill 2023, tabled on 1st February 2023, has proposed several changes to the tax regime applicable to online gaming - both for the users as well as the gaming companies. The erstwhile provisions in the law (sections 115BB and 194B of the Income-tax Act, 1961) have been replaced by new sections (sections 115BBJ and 194BA). The new provisions now require the user to pay income-tax @ 30% on their income from winnings from online gaming. The gaming companies are also required to deduct tax @ 30% at the time of withdrawal by the user as well as at the end of the financial year. The threshold limit of Rs. 10,000 has been done away with and even on smaller amounts now, tax deduction would have to be done by the gaming companies.