Now pay taxes when you withdraw gaming bonus, incentives
Bonuses, referrals and incentives offered by online gaming companies to their customers will be considered as part of winnings and is subject to tax, the Indian government said on Monday.
Online gaming companies will be required to deduct taxes at source if players claim their net winnings, including bonuses or incentives, according to guidelines issued by the Central Board of Direct Taxes (CBDT).
However, bonuses or incentives will not be taxed if they are not claimed or withdrawn, the agency said. That means if you use these bonuses or incentives further for playing, they will not be liable for tax deducted at source, better known as TDS.
Online gaming companies will also not be required to deduct taxes on winnings withdrawn by a player if the amount is less than Rs 100 ($1.22) a month. TDS will also not be applicable if the balance in the user account at the time of deduction is not sufficient to carry out the tax deduction.
Net winnings will be calculated by subtracting the amount withdrawn by a customer from the sum total of deposits in the account and opening balance at the beginning of the year.
The net winnings of a player on online gaming platforms are currently taxed at 30 percent. The latest clarification is a part of guidelines on TDS provisions on income earned through online games. The new tax rule on online gaming, which came into effect on April 1, makes a user liable to pay taxes on eligible earned money. But the onus is on the online gaming intermediary, which has to deduct taxes in a financial year, provided the player falls under the eligible category.
CBDT further clarified that deposits in games such as coins, vouchers, and coupons will be treated as taxable as soon as the player prompts a withdrawal from the system. But as long as this deposit is carried forward in the game as part of playing, there will be no tax. Moreover, if a user borrows the money and deposits it in their account, the sum will not be liable for a tax deduction. Only the money earned through winning will be.
— Written with inputs from Reuters
The post Now pay taxes when you withdraw gaming bonus, incentives appeared first on Techlusive.
Bonuses, referrals and incentives offered by online gaming companies to their customers will be considered as part of winnings and is subject to tax, the Indian government said on Monday.
Online gaming companies will be required to deduct taxes at source if players claim their net winnings, including bonuses or incentives, according to guidelines issued by the Central Board of Direct Taxes (CBDT).
However, bonuses or incentives will not be taxed if they are not claimed or withdrawn, the agency said. That means if you use these bonuses or incentives further for playing, they will not be liable for tax deducted at source, better known as TDS.
Online gaming companies will also not be required to deduct taxes on winnings withdrawn by a player if the amount is less than Rs 100 ($1.22) a month. TDS will also not be applicable if the balance in the user account at the time of deduction is not sufficient to carry out the tax deduction.
Net winnings will be calculated by subtracting the amount withdrawn by a customer from the sum total of deposits in the account and opening balance at the beginning of the year.
The net winnings of a player on online gaming platforms are currently taxed at 30 percent. The latest clarification is a part of guidelines on TDS provisions on income earned through online games. The new tax rule on online gaming, which came into effect on April 1, makes a user liable to pay taxes on eligible earned money. But the onus is on the online gaming intermediary, which has to deduct taxes in a financial year, provided the player falls under the eligible category.
CBDT further clarified that deposits in games such as coins, vouchers, and coupons will be treated as taxable as soon as the player prompts a withdrawal from the system. But as long as this deposit is carried forward in the game as part of playing, there will be no tax. Moreover, if a user borrows the money and deposits it in their account, the sum will not be liable for a tax deduction. Only the money earned through winning will be.
— Written with inputs from Reuters
The post Now pay taxes when you withdraw gaming bonus, incentives appeared first on Techlusive.
