Tax evasion in the gambling industry has gone under the radar of the taxman. The Central Direct Tax Commission (CBDT) has urged online gambling winners to file updated tax returns (ITR-U), disclose their income and pay applicable taxes.
Nitin Gupta, chairman of CBDT, said on Thursday that a gambling portal had given away Rs 58,000 crore over the past three years as gross winnings, according to a report by The Financial Express (FE). It has over 8 million users.
Winners will be charged 30% tax plus interest without any discount. They will also have to pay an additional 25-30% on tax and interest due.
Winners could be subject to heavy penalties if they do not pay their taxes by the deadline. The deadline for filing the ITR-U is generally 24 months after the end of the relevant assessment year. For FY22, the deadline to file the ITR-U is March 31, 2024.
“ITR-U should also be used by winners of these games on other game portals as it would be an efficient arrangement for them to show up and pay taxes rather than suffer the consequences of a penalty”, Gupta said. EF.
On February 15, the CBDT raided a group of businesses engaged in gambling. They searched and seized the group’s operations in 29 locations spread across Mumbai, Delhi, Jaipur, Pune, Kolkata and Surat.
According to Gupta, 100,000 ITR-Us have been deposited since the introduction of the scheme in the 2022 budget. The additional fees paid have been in the region of Rs 28 crore. It is advantageous for people who unknowingly or knowingly did not pay taxes on dues of activities such as gambling, betting, lottery, etc.
Under the new rules, 10% withholding tax (TDS) on banks for canceled loans.
The banks, however, flagged concerns over the implementation of the TDS’s new provisions on canceled loans and asked for government assistance.