Winners of online games are receiving tax letters for unpaid taxes: CBDT chief

The income tax department has begun issuing notices to individuals who have played and won online games, with Rs 58,000 crore in prize money won in the last three years, said CBDT Chief Nitin Gupta on Tuesday.

Wherever there is a mismatch between income and tax payments, the department has begun alerting the winners via the tax compliance dashboard.

"We have mounted an action in this (online gaming) sector and determined that Rs 58,000 crore winnings were there in last 3 years. The data is with us. We are in the process of issuing notices," Gupta stated.

He stated that the notices are being posted on the tax compliance portal and that winners are being reminded to pay their taxes.

"They are expected to voluntarily comply with payment of taxes," according to Gupta.

He added that whenever it discovers that data is supported by proof, the department takes enforcement action and issues notices.

The I-T department's action comes just after the GST intelligence wing issued a show-cause notice to GamesKraft Technologies Pvt Ltd, a Bengaluru-based online gaming portal, demanding Rs 21,000 crore in taxes, interest, and penalties earlier this month.

GamesKraft has petitioned the Karnataka High Court to challenge the SCN that the GST authorities have given it.

The tax was determined using a 28 per cent Goods and Services Tax (GST) rate for online gambling.

Currently, online games of skill are subject to an 18 per cent GST, whereas online games of chance are subject to a 28% GST.

(With inputs from PTI)