The Income Tax department has made substantial collections of over ₹700 crore this fiscal year following introducing a new Tax Deducted at Source (TDS) regime for online gaming and cryptocurrency trading. In a recent announcement, CBDT Chairperson Nitin Gupta revealed that the government has successfully amassed these funds as part of their initiative to ensure that these rapidly growing industries are contributing their share of the nation's revenue. Here are the key highlights of this development: This is with reference to exploring an interaction, a quote, or an authored article opportunity for Mr. Abhishek Malhotra. He is the Managing Partner of TMT Law Practice. Mr. Malhotra is a principal advisor on various policy think tanks and is regularly invited to speak on emerging issues and regulatory changes in the TMT space, including the recent Telecommunications Bill, Information Technology Rules, 2022, Data Protection Bill, Web 3.0 policy concerns, Telemedicine Guidelines, 2020. He is recognized as the “go-to” professional for issues across broadcasting, music, satellite communications, online gaming, and e-sports.
Online Gaming TDS Collections:
Under the new TDS regime for online gaming, approximately ₹600 crore has been collected during the current fiscal year. This marks a significant milestone in the taxation of online gaming, showing the government's commitment to fair and transparent revenue collection.
Cryptocurrency TDS Collections:
Since cryptocurrency taxation commenced on April 1, 2023, the government has collected around ₹105 crore through TDS in the 2023-24 fiscal year. This underscores the government's dedication to regulating and taxing this emerging and dynamic sector.
Taxation of Cryptocurrency:
Effective April 1, 2022, income from the transfer of virtual digital assets or cryptocurrencies is taxable at a rate of 30%. This tax liability applies even if a taxpayer's total income falls below the threshold limit of ₹2.50 lakh. Additionally, deductions are limited to the acquisition cost while calculating the taxable amount. It's important to note that individuals involved in online gaming and cryptocurrency trading must report their earnings from these sectors when filing their individual income tax returns.
This development is a significant step in ensuring these evolving industries contribute to the nation's economic growth and fiscal discipline.