365Telugu.com Online News, March 25, 2025: From April 1, there will be no equalization levy or digital tax on online advertisements. The government introduced a proposal regarding this in Parliament on Monday. This decision will benefit companies that advertise on digital platforms like Google, X, and Meta. According to this amendment, the 6% equalization levy on online advertisements will be revoked starting April 1, 2025.
Digital Tax: No Equalization Levy on Online Ads from April 1
The government introduced a proposal in Parliament on Monday to eliminate the equalization levy, commonly known as the digital tax, on online advertisements.
ఇది కూడా చదవండి..ఆన్లైన్ ప్రకటనలపై డిజిటల్ పన్ను రద్దు..ఏప్రిల్ 1 నుంచి అమలు..
Read this also…Reasons Behind Rupee Depreciation
This move is expected to benefit companies that run advertisements on digital platforms such as Google, X, and Meta. The amendment is part of 59 changes introduced by Minister of State for Finance Pankaj Chaudhary in the Finance Bill in Lok Sabha. The 6% equalization levy was initially imposed on online advertisements starting June 1, 2016.
Under this amendment, the 6% equalization levy on online advertisements will be revoked starting April 1, 2025. According to the amendments proposed in Lok Sabha, Section 163 of the Finance Act, 2016, will no longer apply after April 1, 2025.
The equalization levy was initially introduced through the Finance Act of 2016 to tax online advertisement services, digital ad spaces, or any other facilities or services related to digital advertising. In 2020, the scope of this levy was expanded to include e-commerce transactions made on or after April 1, 2020.
Additionally, the 2% equalization levy on e-commerce transactions was removed on August 1, 2024. Experts believe that the decision to remove the equalization levy on online advertisements is aimed at easing tensions with the United States, which has been threatening to impose retaliatory tariffs.
Read this also…Narayana Educational Institutions Expands Reach with 52 New Campuses Across India
Read this also…Reliance Jewels Unveils Exclusive Festive Offers for Ugadi & Gudi Padwa
U.S. Criticism Over 2% Levy: Sumit Singhania’s Opinion
Sumit Singhania, Partner at Deloitte India, stated that the government’s decision to fully abolish the equalization levy aligns with efforts to simplify income tax laws. Amit Maheshwari, Tax Partner at AKM Global, added that the 2% levy had drawn increased criticism from the U.S.
Following threats of reciprocal tariffs from the U.S., the Indian government appears to be taking a more conciliatory approach by removing the 6% equalization levy on online ads. However, it remains to be seen whether this move, combined with ongoing diplomatic efforts, will lead to a softened stance from the U.S.