Strong vigil at virtual world helped taxman garner over ₹700 crore during April-Sept 2023

On the virtual digital asset front, Gupta shared, "On virtual digital assets, the regime was set up in the last budget, via Finance Act 2022. In the current year, in the first 6 months, the collections from TDS are of about ₹105 crore."

Not just this, when it comes to influencers, finfluencers, YouTubers, etc, Gupta shared that the tax department had been noticing a lot of income generated via posting content on social media, and the income was not been reported under the tax laws.

Tightening the noose around this sector via enforcement action would give a message to content creators to formalise their income. "We keep on trying to identify areas where there could be tax payment is not made and in that series, we mounted some action in this particular sector. We expect that it would give nudge to influencers, finfluencers on Instagram and YouTube elsewhere when they are earning income.

The view of the department is that wherever the taxpayer has a taxable income they should file the return of income. We are doing a lot in terms of taxpayer services. We expect that anyone who has taxable income shall comply with the law of the country, shall file the return of income, and pay taxes accurately," Gupta added.

From March 31, 2023, significant changes were made, aiming to streamline tax collection from the online gaming sector. The government decided that the previous threshold for the applicability of TDS on online gaming winnings, set at ₹10,000, has been eliminated. And, now, all online gaming winnings are subject to a 30% TDS.

Given this, players with net winnings below ₹100 are exempted from TDS. Rule 133, which was notified in May 2023, clarified that any bonuses or incentives provided by gaming intermediaries to users are considered taxable.

For virtual digital assets, a flat rate for taxing income earned from the sale of Virtual Digital Assets (VDAs) like cryptocurrencies, non-fungible tokens (NFTs), and any other VDAs was notified by the government. The new tax rate for VDA came into effect from the financial year 2022-2023 (Assessment year 2023-24).

As per the new rule, the income generated from the sale of cryptocurrencies, VDAs, and NFTs, in FY 2022-23 are subject to a tax rate of 30% and applicable surcharge and cess.