The Indian government finally released the much awaited Union Budget 2017-18 on 1st February yesterday. When Indian government was planning to announce its budget, the whole poker industry and gaming industry in the country was hoping for some important changes and reforms regarding taxation on poker winnings. But this new budget doesn’t have much for the poker industry of India.
To date, poker winning taxation has been very high and Indian players therefore expected some heavy respite and relaxation in the Union Budget 2017-18 . As the heavy tax is levied on the gaming industry, gaming lobbyists especially those from poker industry were pushing hard for some fruitful changes in taxation, taking into the account the constantly growing poker market and increasing number of poker players. The budget did bring up some fruitful changes for Indian economy but unfortunately it does not have much to meet the growing expectations of the poker players, fans and operators.
The new budget for the year 2017-18 doesn’t bring much respite to the players and other stakeholders in the poker industry. According to the Income Tax Act, 30% tax is levied upon poker winnings. TDS (Tax Deduction at Source) certificates are issued to poker players by organizers and companies who are responsible for making the required deductions on the poker winnings from players in India. In spite of several pleas and efforts by the organizers and players regarding deduction in high tax, the tax rates remain unchanged. Indian players will have to still pay 30% of tax on their poker winnings.
A Couple of Positives of Union Budget 2017-18
The good thing about the new budget is that it brings relief to start-ups as well as small enterprises, giving Indian business and economy the much-needed boost in the country. Income tax on companies with annual turnover of less than Rs. 50 crore per year has been reduced to 25% from that of earlier 30%. The year 2016 has seen the poker industry of Indian constantly growing. According to Economic Times, India’s poker start-ups industry was estimated around $120 million recently. Although the pace of growth of has been slow, but it is constantly evolving. Now with tax relief to start-ups, we can expect more investors entering the online poker market and optimizing the growth of poker in 2017.
Talking about the pros and cons of the new budget for the year 2017-18, Jay Satya, who is a gaming lawyer and owner of site glaws.in, stated: “Budget 2017 did not have any specific announcements as far as the gaming industry is concerned. I think the gaming industry will be disappointed that the Finance Ministry has not yet accepted the Easwar committee recommendations and representations from stakeholders regarding hiking of threshold for TDS deduction on gaming/poker winnings from the current Rs. 10,000/-. A couple of positives are that there is minor reduction in individual tax rates for the lower income bracket, which will leave greater disposable income in the hands of the salaried class. Secondly, reduction in corporate tax for companies with less than Rs. 50 crore annual turnover will be beneficial for online poker 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.”
The new budget for the year 2017-18 seems to focus more on rural infrastructure and development, as the Finance Minister indicated that the by the end of 2017-18, about 1.5 lakh gram panchayats will have access to the high-speed broadband connectivity, which will be a good initiative towards boosting the digitized economy. Though more focused on rural infrastructure, this new budget is seen beneficial to Indian online poker and we may expect more online poker companies to come up in 2017.