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No 'achhe din' for gaming industry as FM fails to hike TDS threshold in Budget 2016



Contrary to expectations and the first set of recommendations given by the Easwar committee, Union Finance Minister Arun Jaitley maintained status quo on the taxes from gaming and lottery winnings. The Finance Bill, 2016 has not raised the threshold under Section 194B of the Income Tax Act and has retained the existing taxation provisions.

Under Section 194B, 30% Tax Deducted at Source (TDS) has to be deducted while releasing winnings above Rs. 10,000/- Further, the income tax rate on winnings for assesses also remains unchanged under Section 115BB.

However, Jaitley has hiked the TDS threshold for winnings from horse-racing from Rs. 5,000/- to Rs. 10,000/- and an amendment to that effect has been introduced to Section 194BB of the Income Tax Act in the budget presented today.

The government while retaining the TDS threshold on gaming winnings has ignored the recommendations of the Easwar committee report which proposed hiking the threshold from Rs. 10,000/- to Rs. 15,000/- A section of the gaming industry had also urged Jaitley to go beyond the draft Easwar committee recommendations  by significantly hiking the TDS threshold and reducing the tax rate especially for games of skill like poker and rummy. However, it seems that there has been no positive response by the government on that front yet.

Perhaps, the government may wait for the final set of recommendations from the Easwar committee (expected by the end of this year) before tinkering with the TDS threshold for gaming winnings. In any case, it seems that the fabled ‘achhe din’ or good days have not yet arrived for the gaming industry.

Jay has researched extensively on gaming laws and has been cited by various media houses and journals as an expert. He has helped leading newspapers in their stories on gaming laws. Jay completed his B.A. LL.B. (Hons.) degree from NUJS, Kolkata in 2015 and is currently based out of Mumbai.