The online gaming industry has urged the government to not lessen the current tax deducted at source (TDS) of Rs 10,000, which is supposedly being reviewed by the finance ministry.

In the meantime, the crypto industry has requested that the government decrease the 1% TDS on digital transactions and review income tax provisions to permit investors to balance any loss incurred during the transfer of the virtual asset against income.

The government has launched the process of managing online gaming organizations through proposed rules formulated by the Ministry of Electronics and Information Technology.

Online gaming companies have sought clarity on the tax structure for skill-based games by suggesting that the value of supply for the industry continues to be the gross gaming revenue, which is the fee charged by an organization for facilitating the participation of players.

IndiaTech, which represents gaming organizations like Zupee, has suggested that tax-related incentives ought to be given to native startups in the sector.

The All India Gaming Federation (AIGF), which represents companies such as Mobile Premier League (MPL), WinZo, Paytm First Games, and others, has sought greater clarity on the taxation of online gaming.

“A well-clarified and progressive taxation regime would provide an immense benefit to this sunrise sector,” AIGF chief executive Roland Landers said.

WinZo cofounder Paavan Nanda said a reduction in the TDS threshold from the current winnings exceeding Rs 10,000 could also impede the growth of the industry.

An industry body representing digital currency exchanges and Web3 players—the Bharat Web3 Association—has looked for a review of income tax provisions to let investors and traders offset any loss caused during the transfer of virtual digital assets against their taxable income.