On 1st February 2017, the Indian Government eventually presented the much-awaited Union Budget 2017-18. Although it has a couple of positives, it doesn’t seem to be much favourable to poker players. The poker players in the country were expecting some important changes and reforms regarding high tax on the poker winnings, but they were disappointed to find that the tax rate would remain unchanged. The new budget might have overlooked the poker players, but it sounds favourable to online poker industry with the reduction in income tax on start-ups.
According to the Income Tax Act, 30% tax is chargeable on the income from poker winnings. The union budget 2017-18 retains the same tax provision on the poker winnings, thus bringing no respite to the poker players in India. The players will still have to give 30% of their winnings across various poker tournaments and games. Although the tax rates remain unchanged, this budget brings up a couple of positives for the start-ups in the country. Income tax on start-ups with the annual turnover of below Rs. 50 crore per year has been reduced to 25%. Earlier this income tax amounted 30%. The reduction in income tax for start-ups is being seen as a big positive for India’s poker industry, which is constantly growing and was recently estimated around $120 million.
Echoing his sentiments about the Union Budget 2017-18, Jay Sayta, a gaming lawyer, and owner of the site glaws.in, said: “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 a 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 Union Budget 2017-18 seems to focus more on rural infrastructure and development, as the Finance Minister Arun Jaitley indicated that about 1.5 lakh gram panchayats will have access to high-speed broadband connectivity by the end of 2017, which obviously means the digitized economy is going to take a big boost in times to come. Although the main focus is on rural infrastructure, the new budget can be seen much beneficial for start-ups in online poker industry of India. It is expected that more investors will enter the growing poker market of India in 2017.