money earned in online game taxable income

In contrast, games of chance (such as gambling and betting), where the outcomes rely mostly on luck, were taxed at a 28% GST rate. For example, games of skill (such as rummy or fantasy sports), which depend on a player’s expertise, were subject to an 18% GST rate. Under the new framework, the GST rate of 28% will apply to online gaming, regardless of whether these gaming activities are categorized as games of skill or chance.ĭifferent GST rates were applicable in the previous system based on the online game’s nature. The GST Council has introduced significant amendments to the rules governing the taxation of online gaming. However, the government counters that platform fees are only a fraction of the total pool deposited by users, which it suggests to be the actual revenue earned. Gaming companies argue they already pay 18% GST on the platform fees earned per game. Experts say that the 28% tax makes many online games financially unviable The amount for which show cause notices have been issued to online gaming companies is around 1 trillion rupees. One anonymous government official commented: The tax prompted strong protests from the Indian gaming industry, with some companies like Mobile Premier League even laying off employees as a result. 25 Reuters report, the notices come just two months after India implemented a new 28% tax on all funds deposited by users to play games on online gaming platforms. In a massive crackdown, Indian tax authorities have issued notices to numerous online gaming companies demanding approximately 1 trillion rupees ($12.03 billion) in taxes that the companies allegedly evaded over the years, a senior government official revealed on Wednesday.Īccording to an Oct.

Money earned in online game taxable income