CBDT urges gamers to file income tax returns under updated scheme

The Central Board of Direct Taxes (CBDT) has asked winners of online games to update their income tax returns to file taxes on winnings of online games. Nitin Gupta, Chairman of CBDT, said on Thursday that just one online gaming portal had awarded more than Rs 58,000 crore in winnings in FY20-FY22, but hardly any winners had paid taxes on their winnings. With tax evasion being one of the more serious crimes in the country, the CBDT has urged winners to update their income tax returns (ITR) under the updated income tax returns (ITR-U) scheme. “ITR-U should be utilised by the winners of such games from other gaming portals also, as it would be an efficient provision for them to come forward and pay taxes rather than face the consequences of penalty,” Gupta said. Winners will have to pay 30 percent tax on the winnings without any rebates, along with interest due on the tax as well as the penalties associated with the ITR-U scheme in order to comply with their tax liabilities. What is the scheme? The Finance Act 2022 brought several changes to the Income Tax Act, one of which was the ability to update or revise income tax returns. The ITR-U scheme was brought forth to allow taxpayers to make corrections in the ITRs that they have submitted for the previous two financial years. Currently, taxpayers can use the scheme to revise their ITRs for the financial years 2019-20 (FY20) and 2020-21 (FY21). Using the scheme allows taxpayers to comply with their tax liabilities without facing any legal action. Though taxpayers do need to give reasons for updating their returns. These reasons include not filing the ITR, incorrect reporting of income, reported income under the wrong heads, and reduction of carried forward loss. In addition, taxpayers also need to pay 25 percent extra on the tax and interest due if the revision is done within 12 months, or 50 percent additional interest and tax if the ITR-U is filed after 12 months but before 24 months. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.