The online gaming industry in India has witnessed exponential growth in recent years, driven by rapid digital penetration, affordable mobile internet, increased smartphone usage, and the rising popularity of fantasy sports, e-sports, skill-based contests, and real-money gaming platforms. This growth trajectory has transformed online gaming from a niche entertainment activity into a multi-billion-dollar sector, attracting investment, generating employment, and contributing to the digital economy.
However, this unprecedented expansion has also raised intricate legal, regulatory, and taxation challenges. From the tax policy perspective, the sector occupies a unique position at the intersection of entertainment, commerce, and technology, necessitating a re-examination of traditional tax norms and their applicability to digital business models.
In recognition of the distinct nature and revenue potential of online gaming, the Indian tax authorities have introduced a series of targeted legislative measures under both Direct Tax and Indirect Tax regimes to regulate, govern, and tax this sector effectively.
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