IT Dept gets ₹1,080 cr from online gaming during current FY, says CBDT Chairman

Modalities of this scheme are still to be worked out and we will come out with more granular details soon. We would like to implement it as soon as possible because it is a system-driven process. It could take a month or a maximum of 6-8 weeks to complete the process. The number of entries is more than a crore.  The thought process behind the scheme is that it is not a dispute per say at any forum.

The taxpayer may be or may not be aware of tax demands or there could be a situation that there is a demand and that he would pay it or there could be a TDS mismatch which can happen because the deductor has disclosed X value while deductee claims Y value. All such cases will get resolved without the involvement of the assesee taxpayer. It will be a win-win for taxpayer because, at times, these are not at all payable by the taxpayer. There may not be records available with us or with the taxpayers. It will be an exercise to reduce the grievances and to ensure better trust between taxpayer and the department.

Noting will be required from the taxpayer assessee. The information will be available on the dashboard that particular demand has been extinguished.

As we develop, personal income tax should be higher than corporate income tax. That is the desired trajectory and it is good that we are moving in that direction. When the Prime Minister is talking about Viksit Bharat in 2047 and third largest economy by 2027, such a trend shows we are on the right path. If you see the Budget figures, direct tax to GDP ratio is one of the highest at about 6.6 per cent for the current financial year. For a developed economy, direct tax should be higher than indirect tax and that is quite visible in our data.

Growth in personal income tax is because of several reasons which include use of technology, compliance behaviour of the taxpayers, provision of laws to close the loopholes, annual information statement, discipline in maintaining the date for fling the returns, better assistance to taxpayers among others. The number of taxpayers is also rising. Last year, the growth in the said number was 5 per cent and this year, we have already achieved 9 per cent growth.

The sweetened tax regime, which was announced by the Finance Minister in 2023 Budget, is applicable for the current financial year and returns are due by July 31, 2024. The real picture will emerge after July 31, when we will analyse the returns. But we expect that around 60 per cent individual taxpayers/ Hindu Undivided Family (HUF) should switch to new tax regime.

It is difficult to give you specific details. But I can tell you that it is an elaborate exercise. Some data is to be captured or cross reference is to be made. Take the example of donation. Last year, an elaborate annexure was to be submitted regarding donations for which claims have been made for deductions. There could be some changes like that because of several reasons such as change in statute.

It takes time to bring in new initiatives but I can elaborate on one initiative for which pilot has been done. A Demand Management Centre has started working to tackle demands each with value of ₹1 crore. There have been instances when taxpayers have paid the demand but not considered. There may be some errors. There may be updation by the deductors or there may be some set off of losses. There could be host of factors. For such a demand, the Demand Management Centre at Mysuru will be connecting with tax payers, the chartered accountants of the taxpayers and the assessing officer (AO) at the same time. Since all are on same page, they try to find areas of concerns. Where some resolution is needed, AO has to work on areas discussed thereupon and then we are able to revise the demand because demand is not collectable. Initial results have been very good.

We are participating at global level actively and we are doing the best we can do to protect India’s interests. A team is working on it. There is one component which is domestic in nature. We are waiting for deliberations to be over by March 2024 that is the new deadline, earlier it was December. Let us see how things take shape and a considered call can be taken at the stage of regular Budget.

 During the current year, we have received around ₹1,080 crore as TDS from online gaming.

The law was amended last year and now loss set off is allowed. Since no one can just go on winning, there will be losses too, which is why the law is very realistic and factors in the concern of all the stakeholders. So, there will be few disputes.

Collection is comparable between the last fiscal and the current one. We are not finding much growth. Current year, the collection from TDS till date is around ₹180 crore and last year, it was around ₹220 crore, so the growth is flat.