Budget 2023: Taxability relating to online gaming to be clarified

While the Union Budget 2023-24 doesn’t have any big announcements for the Online Gaming sector, there is an overall move to spur growth and has several initiatives to empower the youth of the country. There is also special emphasis on developing 5G services and the skill sets required for it. The Budget proposes setting up of 100 labs for developing applications using 5G services in engineering institutions to realise a new range of opportunities, business models, and employment potential.

Moreover, the Budget also proposes the minimum threshold of Rs 10,000 for TDS to be removed and taxability relating to online gaming to be clarified. There is also a proposal to provide for TDS and taxability on net winnings at the time of withdrawal or at the end of the financial year.

Gaurav Kapoor, Chief Finance Officer, Baazi Games:

“We welcome the Amrit Kaal Union Budget 2023 with an optimistic perspective. The new income tax regime will result in stimulating local demand and consumption in the economy. The rise of India’s position from an importer to an exporter of mobile phones in India augurs well for the online gaming sector. Moreover, the announcement of setting up 100 labs for developing 5G services apps for smart classrooms, healthcare, and others will open up a new range of opportunities and potential employment. Simplifying the KYC system process will further help in realising ‘Digital India’ and will enable a seamless experience for consumers. Lastly, the ‘Make in India’ vision will further get a boost with a focus on “Make AI in India and Make AI work for India”, online gaming companies can develop new AI-based advancements that can provide a first-of-its-kind experience to users.”

Sunil Yadav, CEO, PlayerzPot:

“It is rightly said that the Indian economy is on the right path and headed in the right direction. When the economy focuses on providing ample opportunities for citizens, particularly our nation’s youth, who are dedicated, focused, and enthusiastic about their goals, its development will be optimal. We are pleased to learn that the Budget has prioritised youth empowerment and the creation of new jobs.

It is a welcome move to define the future of the online gaming industry to remove the minimum threshold of Rs. 10,000 for TDS and to clarify taxability. The action will result in transparency, a clear legal identity, and standardised taxation for online gaming.

We hope that the government will unquestionably support the sector’s growth and development in the right direction, which will benefit the economy and its stakeholders.”

Ishank Joshi, CEO, Mobavenue Media Private Limited, “All eyes were on the government's plan for the online gaming industry. However, during her speech, Finance Minister Nirmala Sitharaman said that the government will issue clarity on the taxation regime for online gaming. The gaming industry is growing rapidly in India and is anticipated to expand to new heights in the years to come. The sector can reach its full potential and significantly boost the national economy with the correct government backing. Simplification, harmonization, and capacity building will consolidate the growth path of the economy.”