Here’s what gaming, esports and tech experts have to say about Union Budget 2023

The Union Budget for 2023–2024 was presented to the Lok Sabha today by finance minister Nirmala Sitharaman. During her speech she also mentioned that the government will clarify how the taxation policy will apply to online gaming.

FM said, “Major measures in terms of easing the taxation burden include removing the minimum threshold of Rs 10000 for TDS and clarifying taxability relating to online gaming; not treating conversion of gold into electronic gold receipts as capital gains, and more.”

She made an announcement of the establishment of three centres of excellence (COEs) for artificial intelligence (AI) at prestigious universities. Also, 100 more 5G labs to be set up for further bolstering the tech sector.

Other measures such as the relief in customs duty for import of critical smartphone parts such as lenses and batteries will help stabilise smartphone prices, and aid more Indians access mobile technologies and games. The raising of the minimum taxable slab from five lakh rupees to seven lakh rupees under the new tax regime will also indirectly help the industry, as it increases disposable income available to consumers. The new rules also brings parity between online gaming avenues such as apps and offline gaming avenues such as casinos.

The government has been announcing significant advancements for gaming and esports over the past few months, but there was no mention of gaming or esports in the budget other than government to clarify tax policy and reduce TDS for online gaming.

Here are the gaming, esports, industry insights on post Budget 2023 announcement:

 Rajan Navani

JetSynthesys founder and CEO and CII Council on Future Businesses chairman Rajan Navani
“This is a progressive and inclusive budget, one that is especially favourable towards the vision of Digital India, towards the empowerment of India’s youth, and towards bolstering the spirit of entrepreneurship and innovation amongst the population. Today, one in 10 people in the world is an Indian under the age of 25. These young guns or Gen Zs are looking at a budget that will empower them not only to be able to improve their livelihood but to also help them get skilled better and build capacity to unlock their true potential. This budget has enabled that precise vision. The PM Kaushal Vikaas Yojana 4.0 to skill Indian youth in new-age courses for Industry 4.0 is great news, not just for our young population but also for all enterprises in the digital and emerging tech space. With Coding, AI, Robotics, Mechatronics, 3D, printing, Drones, IoT and other soft skills being in focus, and the launch of the National Skill Development Mission, the National Policy on Skill Development and Entrepreneurship, and the setting up of 30 Skill India International Centres, the future is indeed promising and bright for billions.

Additionally, the launch of the unified “Skill India” platform to enable demand-based formal skilling, linking with employers (including MSMEs), and facilitating access to entrepreneurial schemes is an overall strong step forward in building and promoting the spirit of entrepreneurship in the country. Further, setting up of dedicated centers of excellence for Artificial Intelligence in top educational institutions to realise the vision of ‘Make AI in India’ and to ‘Make AI work for India’, and the launch of 100 labs to effectively develop 5G services, will bolster Digital India, the overall economy, and our prowess in the field of emerging tech. The future is indeed tech enabled and the measures announced in today’s budget will propel India towards the goal of being a USD 5 Trillion economy and global superpower with concerted focus and gusto.”

 Loco CFO Suhas Khullar

Suhas Kullar

“The Union Budget for 2023–2024 is commendable for setting the bold vision of making India a tech superpower. Two Initiatives focusing on capability building for the tech ecosystem stand out. First, the intention to set up 100 labs for developing applications using 5G services has the potential to open up a wide range of prospects for the ecosystem, including esports. Secondly, setting up of centers of excellence for AI under the “Make AI in India and Make AI work for India” vision, along with the introduction of Pradhan Mantri Kaushal Vikas Yojana 4.0, will help young people in developing the necessary expertise in coding, artificial intelligence, and other technologies. These enhanced digital skills will now support the sector’s capacity to grow into a significant employer.

The initiatives on Entity Digilocker, setting up e-courts, and Central Data Processing Centre would improve transparency, and support the ‘ease of doing business’. The focus on capability building for the technology ecosystem, and improving the ‘ease of doing business’ will help strengthen India at a foundational level.”

MPL chief financial officer Vikash Sureka 

Vikash Sureka

“India’s online gaming industry is at a pivotal moment, and it’s great to see the government’s commitment to fostering its continued progress.

The government in the Finance Bill has made a critical distinction between games of skill and games of chance, classifying them into separate sections. This signals the government’s recognition of the unique nature of each and the need for separate tax policies.

With the introduction of two new sections—194BA (for TDS of winnings from online games for online intermediaries) and 115BBJ (for computation of taxes for those who earn income from winnings of online games)—the government has cleared ambiguities regarding TDS calculation for online gaming and simplifies the process for both companies and users.

The Bill allows TDS to be calculated either at the end of the financial year or at withdrawal, streamlining settlements and returns for users. With this change, users who play multiple games will only have to pay tax at year-end based on their net winnings, eliminating the need to pay tax on notional credit. For companies, the TDS calculation process is simpler, improving compliance. This positive step for the skill-gaming industry has us hopeful for continued government support and guidance.

In addition, the regulations being drafted by the Ministry of Electronics and Information Technology (MeitY) will create a favourable environment for the industry to flourish. We eagerly await the government’s direction on this and are also keen to learn more about the GST mechanism for online gaming. A clear, fair tax rate will boost investor confidence and create a conducive business environment.

This year marks a turning point for the gaming industry and we look forward to collaborating with the government and other industry players to contribute to its growth and success.”

Reboot Game Studios co-founder and CEO Tanu Jain

Tanu Jain

“We appreciate the government’s decision to keep the GST rate unchanged in the AVGC sector. This industry has immense potential for growth and job creation in India. This will encourage more investment in the industry, which will lead to more job opportunities and a thriving AVGC ecosystem in India. 

It is also great to see the government focusing on youth and skill-based development through the fourth phase of Pradhan Mantri Kaushal Vikas Yojana (PMKVY). By focusing on market-driven skills such as coding, AI, Robotics, IoT etc, the scheme will equip young individuals with in-demand skills that will further  increase their employability and is the need of the hour.”

Roland Landers

All India Gaming Federation CEO Roland Landers

“The online gaming industry welcomes the budget announcement by the hon’ble finance minister, particularly in relation to the rationalisation of direct taxation for online gaming. We are happy to note that the Finance Bill carves out the distinction between betting and gambling activities and online games, through introducing a new section 194BA which taxes a user’s net winnings from online games at the end of the financial year. While we await CBDT’s clarifications and guidelines in this regard, we are hopeful that the certainty in taxation offered by the budget announcement will be a huge stimulus for the growth of the online gaming industry.”

Lakshya Digital CEO Manvendra Shukul

Manvendra Shukul

 

“It is heartening to see hon’ble finance minister’s continued focus on the most crucial building block for every sector – Skilling India. The Pradhan Mantri Kaushal Vikas Yojna 4.0 is a huge step towards boosting and promoting new skills in alignment with the emerging needs of industry 4.0. A wide range of sectors, including the gaming industry, are facing a shortfall of skilled workers. India has a huge opportunity to be a leader in global gaming market. However, for us to compete with entrenched players like China, it is essential to develop a strong pipeline of skilled workforce. Today’s budget has come good on the expectations of our youth in terms of investments in skilling and enhanced opportunities for employment creation. We look forward to an effective implementation of Pradhan Mantri Kaushal Vikas Yojana 4.0 that will allow our youth to upskill and be job ready for the global gaming industry.”

TeamLease Edtech head of employability business and COO Jaideep Kewalramani

Jaideep Kewalramani

“The move to setup AI centers in top education centres is a great step forward. This must be augmented by a brain trust to share the research with the entire eco-system. A thrust to develop AI tools that work across all our vernacular languages will be a priority. Integrating Generative AI as a part of the technology stack for enhancing higher education and skill development is important.”

Revenant Esports founder and CEO Rohit N Jagasia

Rohit N Jagasia

“Even though the Budget announcement didn’t specifically bring out the matters of concern related to AVGC sector or the esports segment to be precise, we are glad that attention is given to bring in development that would positively impact our sector. The increased mobile phone production in India will directly impact on the growing interest in mobile gaming. India is a growing market for mobile gamers which will shape the Indian esports sector. Affordable mobile device and the increasing accessibility of gaming platforms have also contributed to the growing popularity of esports in India. This is expected to further drive the growth of the Indian esports industry in the coming years.

We are also looking forward to the progress of 100 labs for apps development using 5G services will be set up in engineering institutions. Hopefully this could be the beginning of the 5G era in India. The announcement of removing minimum threshold of Rs 10,000 for TDS on online gaming and providing clarity on taxability is a big step forward, however most esports games, like ours, don’t have any money withdrawing system so these are applicable for the online gaming sectors which are into Real Money Gaming.”

FanClash co-founder Rishabh Bhansali

Rishabh Bhansali

“The enormous upsurge in mobile phone production has been the impetus for the boom of the esports industry in India. Pocket friendly smartphones have taken gaming and fantasy esports to every corner of the country and a further decrease in its prices as the government proposes to reduce customs duty on import of certain inputs for mobile phone manufacturing will boost the sector’s growth like never before.

We are extremely delighted with the propositions made in today’s budget and looking forward to the golden days that are in store for fantasy esports and gaming in the country.”

8bit Creatives founder and CEO Animesh Agarwal

Animesh Agarwal

“The expansion of India’s gaming business mirrors and contributes to the growth of the mobile phone industry. The number of mobile gamers in India is projected to increase to 650 million by 2025, according to the most recent report from the Internet and Mobile Association of India (IAMAI). 

The previous seven to eight years have been instrumental to the relationship of mobiles and gaming in India, with numerous mobile gaming titles being released and gaining popularity among the Indian gaming community. Developer dedication to expanding mobile gaming in India and the advent of different employment opportunities through mobile gaming have all contributed to an increase in the number of Indians adopting mobile gaming. This has also contributed to the growth of the mobile device sector, as professional gamers frequently seek to upgrade their devices as they progress in their career. Even casual gamers seek better devices in their gaming journey. Interdependence of the industries is also reflected in the commitment of the mobile device companies towards strengthening their presence in the gaming community through dedicated efforts and investments. 

From launching gaming-specific devices such as One Plus Nord, ASUS ROG gaming phones, etc., to hosting multiple events and tournaments for the community, to working with gamers to build a community of mobile gamers, etc., mobile device giants such as One Plus, ASUS, Samsung, etc. are also investing heavily in the gaming industry in India. Indian Gaming has the potential to provide a significant boost to the electronics industry as a whole, spanning consoles, PCs, VR gadgets, mobile devices, wearables, IT accessories, and so on. It will be fascinating to observe the next growth surge of gaming in India and how it contributes to and parallels the rise of electronics industry.”

Esports Federation of India  director & Asian Esports Federation (AESF) vice president Lokesh Suji

Lokesh Suji

“As stated by our honourable finance minister Nirmala Sitaraman in today’s Budget, mobile phone production in India has seen a significant rise in the past few years and that has undoubtedly been a game-changer for the esports industry in the country. Contributing extensively to propelling the industry to unimaginable heights, the increasing availability of smartphones in India at affordable rates has not only expanded the player base by making gaming more accessible but has also attracted investment from companies, resulting in the development of existing as well as newer games. 

With the numbers further upscaling and 5G acting as a catalyst that fuels the industry’s flourishment, we are going to witness monumental growth within the Esports sector in the coming years. As we are still awaiting clarity on the taxability for Esports, we are hopeful that the decisions will be in favour of the community and impact it positively.”

Alpha Zegus founder and director Rohit Agarwal

Rohit Agarwal

“An increase in smartphone production in our country will bring down smartphone costs drastically – that’s a big win for the gaming industry! More advanced smartphone tech will be available at accessible pricing, which means gaming will eventually no longer be restricted by hardware capabilities. Really looking forward for this to be massively adopted.

Modifications to the TDS limit will impact the Real Money Gaming industry more than the Esports industry. Since esports games majorly do not have a system of ‘money withdrawal’, TDS does not impact them. As for the RMG industry, the removal of TDS threshold is a bit debatable. Most forms of income in India is considered under the Rs.10000 TDS threshold. If we consider ‘winnings’ as ‘income’, then the threshold should remain the same.”

Baazi Games chief finance officer Gaurav Kapoor

Gaurav Kapoor

“We welcome the Amrit Kaal Union Budget 2023 with an optimistic perspective. The new income tax regime will result in stimulating local demand and consumption in the economy. The rise of India’s position from an importer to an exporter of mobile phones in India augurs well for the online gaming sector. Moreover, the announcement of setting up 100 labs for developing 5G services apps for smart classrooms, healthcare, and others will open up a new range of opportunities and potential employment. Simplifying the KYC system process will further help in realizing ‘Digital India’ and will enable a seamless experience for consumers. Lastly, the ‘Make in India’ vision will further get a boost with a focus on “Make AI in India and Make AI work for India”, online gaming companies can develop new AI-based advancements that can provide a first-of-its-kind experience to users.”

Satish Kataria

FANDORA.APP founder Satish Kataria
“It seems that the government has not given heed to potential demand of rationalising taxation on the virtual digital assets in this budget. I would like to reiterate that while Crypto Currencies as such could be speculative instruments, and hence demanding a higher taxation perspective – not all digital assets should be made part of this category. Again, while the government has issued its clarity of digital tokens underlying real time assets – but then, Non Fungible Tokens (NFTs) representing underlying art and content IP – are still dappling under the uncertain regime. I hope that the government realises that such NFTs and Web3 assets can actually help our content industry multifold – through adding additional monetisation layers to their existing content and enabling audiences to engage with their favourite creators in a more active, significant manner. I believe that the government should encourage Content based NFTs and bring them under the category of real asset based tokens – thus providing essential incentivisation for Indian content creators to create even a better global impact.”

Witzeal Technologies CEO and Founder Ankur Singh 

Ankur Singh

“We are thrilled with the announcement of the first budget of Amrit Kaal that envisions an empowered and inclusive economy driven on the fundamentals of technology and knowledge. India is now the third largest ecosystem for start-ups globally and ranks second in innovation quality for middle-income countries. Fostering the development of start-ups in the online gaming industry, the initiative of ‘Make AI in India, make AI work in India’ will potentially boost the growth of gaming studios. The hon’ble finance minister particularly mentioned clarifying the taxability relating to online gaming. Now as the Indian gaming market is expected to grow at a 27 per cent CAGR reaching 8.6 billion dollars by 2027, government support will further help to streamline the industry and provide structured growth to this burgeoning industry.”  

 PlayerzPot  CEO Sunil Yadav
 
Sunil Yadav

 

“It is rightly said that the Indian economy is on the right path and headed in the right direction. When the economy focuses on providing ample opportunities for citizens, particularly our nation’s youth, who are dedicated, focused, and enthusiastic about their goals, its development will be optimal. We are pleased to learn that the budget has prioritised youth empowerment and the creation of new jobs.

It is a welcome move to define the future of the online gaming industry to remove the minimum threshold of Rs. 10,000 for TDS and to clarify taxability. The action will result in transparency, a clear legal identity, and standardised taxation for online gaming.

We hope that the government will unquestionably support the sector’s growth and development in the right direction, which will benefit the economy and its stakeholders.”

Bharat Patel

 

Yudiz Solutions chairman and director Bharat Patel 
“Considering how fast India’s economy is adapting to modern technologies, the budget surely emphasises the ‘Amrit Kaal’, mentioned by our honourable prime minister. We at Yudiz are particularly thrilled that the government has recognised the potential of the gaming industry, and has taken steps in this budget towards fairer recognition of incomes from gaming. It is a positive move that the government has clarified that taxes will be applicable on net winnings, and not on aggregate winnings. We’re also grateful that honourable finance minister Nirmala Sitharaman has said that the government will issue more clarity on the taxability of online gaming, and ease the tax burden. Proactive measures such as these can unleash the brimming gaming potential of India.”

Technology and gaming lawyer Jay Sayta

Jay Sayta

“The budget and Finance Bill, 2023 has provided important clarity on applicability of TDS for winnings on online gaming platforms that the industry was seeking. It is a welcome step that the concept of ‘net winnings’ has been recognised in the Income Tax Act for online games and TDS only has to be deducted at the end of the financial year or at the time of withdrawal from the user account. However, the manner in which net winnings are supposed to be calculated and the set-offs that may be permitted before calculating such net winnings are left to be clarified by the CBDT through rules/guidelines. Hopefully, the CBDT will soon provide guidance on the manner in which net winnings have to be calculated.”

Ability Games founder Suraj Chokani

Suraj Chokani

“It is an excellent budget from every aspect, from our point of view. The FM spoke about 7 major thrusts in the budget, calling it Saptrishi, out of which the 6th pointer spoke about new-age technologies. Recognizing such new age tech in itself is a big boost to the industry as a whole and shows the forward looking character of the Government. Focus on MSME and Startups is also a welcome step from our perspective and will help us go a long way. Overall we are very happy and satisfied with such an inclusive Budget.”

Poker high promoter Gaurav Gaggar
 
Gaurava Gaggar

“Overall a very balanced budget. From a gaming point of view, the TDS limit of 10k is being revised. TDS will now be deducted from the first winnings but the big part is that it will be calculated at the time of withdrawal or settled at the end of the year and therefore losses can be adjusted through the year. This is good clarity from the government. They are also going to define gaming more properly for this purpose. With regards to GST, we hoped to get more clarity on the rate and the mechanism of charging it on service fees charged by the gaming companies rather than the deposits. This issue remains and needs to be sorted.”

Mobavenue Media CEO Ishank Joshi

Ishank Joshi

“All eyes were on the government’s plan for the online gaming industry. However, during her speech, Finance Minister Nirmala Sitharaman said that the government will issue clarity on the taxation regime for online gaming. The gaming industry is growing rapidly in India and is anticipated to expand to new heights in the years to come. The sector can reach its full potential and significantly boost the national economy with the correct government backing. Simplification, harmonization, and capacity building will consolidate the growth path of the economy.”

Nazara Technologies founder CEO and Jt MD Nitish Mittersain

Nitish Mittersain

The Union Budget 2023 has given prominence to digital infrastructure. The intent is not only on developing but building an ecosystem. The budget makes digitisation an integrated aspect of all sectors. AI is the next level in technology innovation and enterprise creation. The creation of three centers of excellence for artificial intelligence to enable ‘Make AI for India’ and ‘Make AI work for India’ will be a game changer in streamlining AI further. The budget also emphasizes developing applications under 5G as the country makes way for it.

While focusing on new pillars of growth, the budget has also given start-ups their due credit. Establishing a National Data Governance Policy to enable access to anonymized data and extending the date of incorporation for income tax benefits to start-ups will be a game changer. In addition, removing the minimum threshold of Rs 10,000/- for TDS and clarifying taxability relating to online gaming is one of the key takeaways.

The proposed Union Budget also reflects the proactive approach by the government in streamlining the tax system and promoting fairness in the industry.”

The proposed National Data Governance Policy, which would provide start-ups access to anonymized data, and the provision of the benefit of carrying forward losses on changes in shareholding of start-ups from seven to ten years after incorporation have also received appreciation from experts.