Tax On Gaming Industry: The Income Tax Department is keeping an eye on those who win big money in online games. The Central Board of Direct Taxes (CBDT) has asked those earning money by playing online games to file an updated income tax return (ITR) and disclose the correct income and pay tax on it.
According to media reports, CBDT chairman Nitin Gupta said that a gaming portal has distributed Rs 58,000 crore to the winners of online games during the last three years from the financial year 2019-20 to 2021-22. Whereas none of the winners of the game have paid tax on the winning amount. The CBDT has asked the winners to file an updated income tax return, disclose the correct income and pay tax on it.
As per the instructions of CBDT, online game winners will have to pay a total tax of 30 per cent without any rebate along with interest. These people will have to pay penalty along with tax. This applies to all the winnings on the gaming portal.
In fact, through the Finance Act 2022, changes were made in the Income Tax Act, in which there is a provision for filing updated income tax returns. Through these provisions, taxpayers are given an opportunity to make corrections in income returns. And taxpayers can make corrections in ITR for two financial years. At present, taxpayers can make corrections in income tax returns for the financial years 2019-20 and 2020-21.
Taxpayers have to disclose the correct income in the updated return. During this, taxpayers have to pay 25% more tax along with interest. If the updated return is not filed within 12 months, then 50 percent additional tax has to be paid along with interest if the updated return is filed within 12 months to 24 months.
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