Infrastructure

Union Budget 2021 seeks to bring changes—can legalized gambling help it?

Read more at www.dnaindia.com

India’s 2021-22 Union Budget is focused on stabilizing growth amid the ongoing COVID-19 pandemic. Presented on February 1, the Finance Bill, 2021 has been described by former Union Minister Suresh Prabhu as “historic” as it creates “new development opportunities for the Indian economy.”

The Union Budget comes as the government of India grapples with the impact of the global pandemic. Recently, the government of India in Delhi and the Japan International Cooperation Agency (JICA) has signed a loan agreement for up to 30 billion yen—or over Rs 2,100 crore—for the government’s program to address COVID-19’s socio-economic impact across different sectors.

New normal’ budget for 2021

Finance Minister Nirmala Sitharaman said this year’s budget is “like never before.”

In 100 years, India wouldn’t have seen a budget like this,” the finance minister was recently quoted as saying. “Considering our size, population and potential that India hold for good growth and building of economy, I wouldn’t hesitate here to say that we shall be the engine of global growth along with a few other countries. We will be a significant contributor to global economic revival.”

Analysts describe the Union Budget 2021 as a symbol of the government’s “less is more” approach as it attempts “to purge the Indian economy afflicted by year long slowdown caused by the coronavirus outbreak.”

Amit Singhania, partner, and Suyash Sinha, senior associate of Shardul Amarchand Mangaldas &Co. wrote in The Hindu: “In all, as is evident, the Finance Bill, 2021 attempts to bring changes that affect every sphere, without doing too much. Effective implementation of these measures, listening to stakeholders and rolling out further clarifications where due is going to be key for the success of this fiscal’s Union Budget.”

How about tax for online gambling?

There are many out-of-the-box measures that can help Sitharaman and company raise capital. Legalised gambling—online gambling, sports betting like fantasy cricket, even casinos in India such as 10Cric —offers a chance for the government to raise revenue.

India’s tax rules covering gambling remain unclear, although the Public Gaming Act of 1867 has set up the foundation of gambling levy requirements and categories. There are several legislative acts that also serve as the basis of India’s gambling taxation. For instance, Section 115BB of the Income Tax Act of 1961 specifies that any winnings from lotteries, crossword puzzles, race betting, card games like Andar Bahar, Teen Patti, and online rummy and other games, as well as gambling or betting of any form or nature is taxed at a flat rate of 30%. This is applied to all online gambling winnings regardless of an individual’s total income—no exemptions are made.

“We have seen, over the past years, a steady increase of users who want to play teen patti and andar bahar for real money. It’s our firm belief that India will benefit greatly from a regulation and the taxes that come with it, as it is today, the majority of the gambling revenues goes to off-shore gambling websites. Says Mattias Bergehed, CEO of ENV Media

As business coach Gaurav Bhagat tells The Week, “I know this has a social repercussion, (but) the revenue that this can generate for the coffers of the government will be really very high… There already are existing underground channels which exist for sports betting and legalising it will help in generating an amazing revenue for the exchequer.”

Read more at www.dnaindia.com

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