The Income Tax Department of India has successfully collected more than Rs 1,260 crore in taxes from online gaming and trading in cryptocurrency during the current fiscal year, following the implementation of a new Tax Deducted at Source (TDS) regime for online gaming and cryptocurrency trading, announced CBDT Chairperson Nitin Gupta, as per a report on PTI.
As of January 31, 2023, approximately Rs 1,080 crore has been collected under the tax deduction at source category from the online gaming sector, while an additional Rs 180 crore has been acquired through TDS from the taxation of virtual digital assets, specifically cryptocurrency, in the 2023-24 fiscal year.
The Finance Act of 2023 introduced a new section, 194BA, in the Income-Tax Act, 1961, effective from April 1, 2023. This section mandates that online gaming platforms must deduct TDS from the net winnings in a person’s user account. The tax deduction is required at the time of withdrawal and at the end of the financial year.
Moreover, starting April 1, 2022, income generated from the transfer of virtual digital assets or cryptocurrencies became subject to a 30% tax rate. This taxation applies even if a taxpayer’s total income falls below the threshold limit of Rs 2.50 lakh. Additionally, no deductions, except for the acquisition cost, are allowed while calculating the taxable amount.
Taxpayers indulged in online gaming and cryptocurrency trading are required to declare their earnings from these sectors when filing their individual income tax returns. The successful collection of over Rs 1,260 crore demonstrates the government’s commitment to regulating and taxing the expanding online gaming and cryptocurrency industries, ensuring compliance and contributing to the nation’s revenue.