Budget 2023 Envisages Levy of Tax on Online Game Winnings

In accordance with Budget 2023, with effect from July 1, 2023, tax must be deducted at source, from the net winnings gained through online games at the time of withdrawal from the user account. Additionally, tax will also be deducted from the balance left in the concerned user account at the end of the financial year. To ensure this, Section 194BA would be inserted into the Income Tax Act, 1991.

The winnings from online gaming would be taxable at the rate of 30% as proposed under the Budget. The said rate of tax would be incorporated into the Act vide Section 115BBJ. These provisions shall be effective from April 1, 2024, i.e., AY 2024-25.