Confirming Storyboard18’s story (in July) on how Telangana could be the first state in India to introduce comprehensive esports policies, the state’s IT Minister shared that the work has already begun and comments have been shared.
Telangana IT Minister, D. Sridhar Babu addressed Storyboard18’s query at the 16th edition of the India Game Developer Conference (IGDC) which is being organised by the Game Developer Association of India (GDAI).
Babu said, “Industry stakeholders have put in their suggestions and their opinions before us. And we told our officials to sit on that and let us see how it goes because we haven’t made any decision on it. The team of officials are having a discussion.”
“Whatever is beneficial for our state and what can create employment for our people will be the top priority.”
Back in July, Storyboard18 reported that multiple stakeholders from the Indian gaming and esports industry met Telangana’s IT Minister D Sridhar Babu to address critical issues including taxation on esports prize pools, distinguishing between skill-based and chance-based games, and regulating gaming content creators.
Read more: Telangana sets the stage for India’s distinct esports policies: Exclusive
Stakeholders have engaged with state officials and the IT Minister extensively to shape forthcoming policies and regulations. There is considerable interest in establishing governing bodies to oversee esports activities.
The esports organisations on winning any esports tournaments are subjected to pay fixed flat tax of 30 percent under Section 194B of the Income Tax Act which governs lottery winnings taxation in India. In addition to the basic rate of 30 percent, a health and education cess at the rate of 4 percent of the amount of tax is levied. Thus the effective tax rate on lottery winnings comes up to 31.2 percent.
Stakeholders have specifically addressed concerns regarding the tax implications for esports tournaments, highlighting the unique nature of esports compared to money-based games.
The state officials understand that esports is a very different space and acknowledged that esports and money-based games are different.
It should be noted that the professional esports sector in India, distinct from online gaming, was valued at nearly $40 million (Rs 333 crore) in FY23 and is projected to grow to $100 million by FY28, according to Lumikai, a venture capital firm.
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Babu was present at the conference which is taking place from November 13-15 at the Hyderabad International Convention Centre (HICC).
He also informed the media that the state is also pitching to have a Center of Excellence in Telangana.