Union Budget 2024: Major tax revisions set to boost gaming and esports sector

Finance Minister Nirmala Sitharaman has announced significant revisions to the capital gains taxation structure. The Union Budget 2024 has received positive feedback from stakeholders in the gaming and esports industries. Measures like as the elimination of the Angel Tax and reduced capital gains tax for startups have been welcomed.

Rajan Navani, President of the Indian Digital Gaming Society backed by CII and the Vice Chairman & MD of Jetline Group of Companies and the founder and CEO of JetSynthesys states, "The reduction in tax on long-term capital gains from the sale of shares of startups and unlisted entities by 8-9% to 12.5% is another significant advancement. Bringing this rate on par with listed shares achieves long-awaited parity and will massively increase domestic capital investment through family offices and venture funds in startups and new-age businesses."

He points out the allocation of Rs 2 lakh crore, including Rs 1.48 lakh crore for education and skilling, highlighting the government's commitment to preparing our youth for the future. The new centrally sponsored skilling scheme, in collaboration with state governments and industries, is a significant advancement. By designing courses with industry input, the government ensures that our youth will emerge as seasoned professionals, ready for a rapidly evolving job market. This continuous upskilling approach aligns with the principle of a lifetime of careers, empowering individuals to adapt to technological advancements and industry shifts.

While addressing the impact of union budget on the gaming and esports industry, he says that the industry has long advocated for youth upskilling, and it is encouraging to see the government align with this vision. A tech-savvy, skilled workforce is vital for these sectors, and the increased investment in education and skilling will undoubtedly equip young talent to excel.

Akshat Rathee, Co-founder and MD of NODWIN Gaming says, "We’re happy to hear the Hon'ble Finance Minister’s announcement to rollback the Angel tax for all investors in today’s Union Budget. This move will create a vibrant environment for startups across the nation and is a major boost for Indian gaming and esports entrepreneurs, leading to more opportunities as well as higher engagement with the youth. The plan to simplify FDI rules and promote the use of the Indian Rupee for overseas investment is a promising approach that will encourage global entertainment giants to invest in India, further strengthening our position as a global cultural and entertainment destination."

According to him, focusing on enhancing sports infrastructure in Bihar is a positive step since the state has already shown its commitment to integrating esports into mainstream sports. This additional government support will help nurture young talent and promote esports as a new-age sport nationwide.

"Additionally, reducing the BCD on mobile phones, chargers, and PCDA will make smartphones more affordable, which is fantastic for mobile gaming enthusiasts. This will boost mobile gaming adoption within the nation and further strengthen India's position in the global mobile gaming market, bringing us closer to becoming the largest. Overall, we’re excited to dive into these opportunities to drive growth and make waves," he states.

Roby John, CEO and Co-Founder of SuperGaming shared his opinion on the reduction in customs duty on mobile phones and the removal of the Angel Tax. He says, "Today's Union Budget, presented by Finance Minister Nirmala Sitharaman, offers multiple benefits to the country’s video gaming ecosystem. The reduction in basic custom duty on mobile phones is a move that will make smartphones more affordable, which is excellent news for India's extensive mobile gaming community."

"For our upcoming game, Indus, and other games in the market, this means reaching a broader audience and accelerating growth in the mobile gaming sector," and adds, Additionally, the removal of the Angel tax is a major boost for the entire startup ecosystem. This will give relief to more gaming and esports entrepreneurs who want to bring their innovative ideas to life, thereby strengthening the gaming and esports ecosystem in India. Overall, we are confident that these measures will propel India's tech and video gaming industry, bringing India’s gaming culture forward,” he empahsizes.

Addressing the budget, Dr Aruna Sharma, Policy Advisor, Practitioner Development Economist and Former Secretary to GoI proposes alternatives such as merging apprenticeships with MSMEs and using online games to engage skill development. She says, "The Economic Survey released on 22nd July highlights the urgent need for right skilling, revealing that 50% of the youth are not employable due to inadequate skills. As an outcome, like this year, skilling has been a focus area for the government in the past many years."

She further adds, "However, despite a decade of investment in skilling, the allocated budgets have not delivered the desired results. Attaching a couple of apprentices to MSMEs might prove to be essential. Furthermore, online gaming could be an effective tool for skill development through engaging methods. We need trained individuals who are focused, dedicated, and hardworking."