The Central Board of Direct Taxes (CBDT) has revealed that the online gaming winners of an Indian app have won a total of ₹58,000 crores in the last three fiscal years.
The board refused to reveal the name of the company. However, the board confirmed that it was an Indian company. Furthermore, a Group of Ministers will have a meeting on Monday to finalise its suggestions for the GST on online gaming, casinos, and horse racing.
Nitin Gupta, the Chairman of CBDT, said, “Requesting the online gaming winners to come forward and file the updated return pay the tax. Whatever data we have, we will proceed forward. Taxpayers should come forward voluntarily and it is the best thing. Some may have earned more and some less, some might have earned in millions and some in small amounts.”
Online gaming winners will have to pay ₹20,000 crores in taxes
The Income Tax Department has urged players to come forward and pay a 30% tax on their earnings, which is the current income tax rate on online gaming. As a result, the total tax due in the case of the said company is around ₹20,000 crores.
Further, he added that the department requires information about the winners. Not filing the tax on the earnings could result in action from the Department.
This year saw the introduction of a new updated return scheme that enables an assessee to file a return for any earnings that they were unable to include in their initial return. Moreover, for the previous two assessment years, it will be acceptable with an additional tax payment of 25% to 50% of the total amount owed. The “winner” has until March 31, 2023 and March 31, 2024, respectively, to file the updated return for Assessment Years 2020–21 and 2021–22 (Fiscal Years 2019–20 and 2020–21). The winner can submit a revised return for the fiscal years 2022–2023 (FiscalYear 2022–2023) until December 31, 2022, with no additional payment required.
The current income tax rate for online gaming is 30%. Nitin Gupta said, “No expenses are allowed. If you have lost the game, nothing is allowed. Each win is taxed. It is like lottery. Loss cannot be adjusted against the win.” Accordingly, the aforementioned company owes a total of 20,000 crore in taxes.
Online gaming winners have to pay 30% of taxes on their earnings irrespective of their losses. It will be interesting to see what will be the outcome of the Group of Ministers meeting on Monday. Follow Esports91 on Instagram and stay tuned to our website for more news and updates.