CBDT asks those who have won money in online games to pay taxes, file updated ITR

Income Tax

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Aug 30, 2022

If you have won money playing online games in the previous financial year, then as per the Central Board of Direct Taxes (CBDT), you must file an updated ITR (i.e., ITR-U) and pay taxes on the online game winnings accordingly.The CBDT chairman Nitin Gupta, in an interview with PTI, said that ITR-U could also be utilised by those categories of taxpayers who have income from online games, lotteries and betting etc. "This is a provision for them to come forward and pay taxes rather than face the consequences of penalty or any other legal action under the income tax law," the CBDT chairman said.
ITR-U stands for income tax return - updated; announced by the finance minister Nirmala Sitharaman in her Budget 2022 speech. ITR-U is filed under section 139(8A) of the Income-tax Act, 1961. ITR-U or updated return was introduced to give taxpayers an easy route to correct mistakes related to estimating their incomes on which tax is payable.
ITR-U provides an opportunity to update one's income tax returns within two years after the end of the relevant assessment year. ITR-U provides an opportunity for taxpayers to include any income they forget to pay tax on while filing their ITR. It is important to note that additional tax is payable at 25% to 50% on the additional income.

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