Budget 2023: Gaming industry welcomes TDS change, awaits clarity on GST

In the Budget 2023, Finance Minister Nirmala Sitharaman announced a 30 per cent tax on the “net winnings” from online games. Clarifying the taxation policy further, she announced the removal of the minimum threshold limit of Rs 10,000 for calculating the tax deducted at source (TDS).

The 30 per cent tax will have to be paid at the time of withdrawal of the winnings or at the end of the financial year. Also, TDS will be applicable on winnings, and the ultimate responsibility of the tax will be borne by the person responsible for paying the winnings.

Two new sections were added to the Income Tax Act to incorporate the changes.