News | Tax

CBDT Asks the Winners of Online Games to Pay Taxes, File Updated ITR

MAS Team 08 September 2022
0
SHARE

Tax evasion in the gaming industry has come under the radar of the tax department. The Central Board of Direct Taxes (CBDT) has urged the winners of online games to file updated income tax returns (ITR-U), disclose their incomes and pay the applicable taxes.
 
Nitin Gupta, chairman of CBDT, stated that one gaming portal has distributed Rs58,000 crore in the last three years as the gross winning amount. It has over 8 million users.
 
The winners will have to pay 30% tax along with interest without any rebates. They will also have to pay an additional 25-30% on both the tax and the interest due.
 
The winners might be subjected to hefty penalties if they fail to pay tax dues by the deadline. The last date to file the ITR-U is generally after 24 months after the end of the relevant assessment year. For FY22, the last date to file the ITR-U stands on 31 March 2024.
 
"ITR-U should be utilised by the winners of such games from other gaming portals also, as it would be an efficient provision for them to come forward and pay taxes rather than face the consequences of penalty," Gupta said.
On 15th February, the CBDT had raided a business group engaged in gaming. They searched and seized operations of the group in 29 locations spread over Mumbai, Delhi, Jaipur, Pune, Kolkata and Surat.
 
According to Gupta, 100,000 ITR-Us have been filed since the scheme was introduced in Budget 2022. The additional taxes paid have been to the tune of Rs28 crore. It is beneficial for the people who may have unknowingly or knowingly not paid taxes on dues from activities like gaming, betting, lottery etc.
 
Short for income tax return – updated, ITR-U was announced by finance minister Nirmala Sitharaman in her Budget 2022 speech. It is filed under section 139(8A) of the Income-tax Act, 1961. The update return option was brought in to make it easier for taxpayers to correct mistakes related to estimating their incomes on which tax is payable.
 
It must be noted that individuals who will be filing ITR-U will have to state reasons for updating the income. These may include - return previously not filed or income not reported correctly, wrong heads of income chosen or reduction of carried forward loss.
 
In the form ITR-U, the assessee needs to disclose only the amount of additional income, under the prescribed income heads, on which additional tax is required to be paid. No detailed income break-up needs to be disclosed. 
 
The period for filing of ITR-U is within two years after the end of the relevant assessment year. So, in the current financial year 2022-23, a person can file an updated return for AY 2020-21 and AY 2021-22. ITR-U provides an opportunity for taxpayers to include any income they forget to pay tax on while filing their ITR. 

SHARE

User

  Loading...
  Loading...

To continue


Please
Sign Up or Sign In
with

Email

We are listening!

Solve the equation and enter in the Captcha field.

Changes in Our Business Model
 
 
25th Sept 2020
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
 
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
 
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
img
Debashis Basu
Founder