Taxability of winning from online games | which ITR form is to be used in such case | Sec 115BBJ |
Taxability of winning from online games | which ITR form is to be used in such case | smart money tactics tax on online gaming online income bd online gaming gst form 26as explained tds income tax Taxability winning online games online gaming taxation income tax return make money online financial education tax deductions for youtubers financial independence games ka tds kaise refund le winning from games itr filling itr for winning from games itr filling for gambling personal finance Section 115bbj 1. Background Online gaming industry has experienced a massive upsurge in the recent past in India, attracting huge investments in companies offering these services. With almost every individual having their personal smartphones and computers, the scope of online activities has widened, games being the most attractive one among all the age-groups. Celebrities are fully involved in promoting/publicizing such games viz, Dream11, Rummy Circle, My11Circle, Pokerbaazi, First Games, etc. Looking at the current scenario, the government has launched new provisions vide Finance Act, 2023 for the taxability of winnings from online games. The government introduced section 115BBJ – the charging section and section 194BA – TDS on winnings from online games. 2. What is Online Gaming? A game that is offered on the internet and is accessible by a user through a computer resource including any telecommunication device is termed as an online game. 3. Section 115BBJ – Charging Section Winnings from any online game shall be charged to tax under this section of the Income Tax Act, 1961. The rate of taxon such income shall be 30% excluding surcharge and cess. The section was applicable from 1st April, 2023, i.e., any income from online games from the said date shall be taxable under this section. 4. Section 194BA – TDS on Winnings from Online Games Any person responsible for paying to any person any income by way of winnings from any online game during the financial year shall deduct income-tax on the net winnings in his user account under the said section of Income Tax Act, 1961. The applicable rate of TDS shall be 30% at the time of withdrawal (without any threshold) of such winning amount. “Any Person” here means the one making payments of winnings or online gaming intermediary. “Net Winnings” is A – (B + C), where A is the amount withdrawn, B is the aggregate of non-tax deposits made by the user until the time of withdrawal and C is the opening balance at the beginning of the financial year. “User Account” means a user who has registered with an online gaming intermediary, delivering one or more online games. The section was applicable from 1st July, 2023, i.e., tax shall be deducted from any income from online games from the said date. 5. Need for Introduction of Provisions Taxability of such winnings before the introduction of section 115BBJ and section 194BA was governed by section 115BB – taxability of income from lottery, crossword puzzles, etc. and section 194B – TDS on income from lottery, crossword puzzles, etc. Considering the distinctive nature of online games, the government decided to separate the taxability of tax winnings from online games
