The Union Budget presented by Finance Minister Arun Jaitley yesterday was expected to simplify the direct taxation system and reduce income tax in a big way. However, Budget 2017 did not have any specific announcements as far as the gaming industry is concerned.
In fact the budget left many in the gaming industry disappointed as the Finance Minister did not hike threshold for TDS deduction on gaming, card games, casino or lottery winnings from the current Rs. 10,000 despite the Easwar committee recommending in January 2016 that the limit should be raised to at least Rs. 15,000 . The government also did not change the prevailing 30% tax on winnings from lottery, gambling or other games.
However, there were a couple of general positives from the budget. First, the reduction in individual tax rates for the lower income bracket will leave greater disposable income in the hands of the salaried class and professionals, thereby possibly leading to increased spending on gaming and other recreational activities. Secondly, reduction in corporate tax to 25% from the existing 30%, for companies with less than Rs. 50 crore annual turnover will be beneficial for online poker, rummy, fantasy sports and other gaming startups. The online skill games industry will also be relieved that the service tax rate was not hiked as was widely expected.