As the Indian Online Gamers Gained Rs. 58,000 Crore in 3 Years. The Income Tax Department has requested those “winners” of 58,000 crore over the course of the previous three years on an online gambling platform come forward, file updated or revised returns, and pay the necessary taxes. The GST on online gaming, casinos, and horse racing is the subject of a Group of Ministers (GoM) meeting on Monday.
A brief details about IT Department Urges to Pay taxes who have won from Online Gaming Sites
According to the Central Board of Direct Taxes (CBDT), you must file an updated ITR (i.e., ITR-U) and pay taxes on any winnings from online games if you made money playing them during the previous fiscal year.
Nitin Gupta, the chairman of the CBDT, stated that taxpayers who receive revenue from online gaming, lotteries, betting, etc. may also use the ITR-U. In order to avoid penalties or other legal action under the income tax legislation, the CBDT chairman said, “This is a provision for them to come forward and pay taxes.”
A simple explanation on what is ITR-U?
ITR-U stands for income tax return – updated, and it was introduced by Nirmala Sitharaman, the finance minister, during her presentation of the Budget 2022. According to section 139(8A) of the Income-tax Act of 1961, ITR-Us are filed. ITR-U, or the updated return, was created to allow taxpayers a simple way to fix errors in estimating their incomes for tax purposes.
Within two years of the conclusion of the applicable assessment year, ITR-U gives taxpayers the chance to revise their income tax returns. Taxpayers have the chance to incorporate any income they neglected to disclose in their ITR file on ITR-U.
As a result, taxpayers who update their returns for FY20 are required to pay tax, interest, and an additional 50% of those amounts.
25% of the owed tax and interest will be the additional sum for FY21. The total amount of your gambling winnings is subject to a 30% tax penalty, no exceptions.
Taxpayers who file modified returns will need to explain why they updated their income. The causes could be a previously unfiled return, incorrectly reported income, the selection of the incorrect heads of income, or the reduction of a loss that had been carried forward.
Prior to ITR-U, a person had the option to just file a revised ITR in order to fix any errors that had been committed when filing their return. The updated ITR must be submitted by December 31 of the assessment year. Once this deadline has passed, it is impossible for the person to fix ITR filing errors.
ITR-U can currently be submitted for the fiscal years 2019–20 and 2020–21, as well as the assessment years 2020–21 or 2021–22.
After around 1 lakh returns were submitted by taxpayers using the recently adopted return filing form known as ITR-U, the income tax department has received approximately Rs 28 crore in taxes.
In a review, the income tax authority discovered that between FY20 and FY22, a gambling portal’s gross winnings were Rs 58,000 crore. There were around 8 million players registered on the web.