{"id":31471,"date":"2025-03-25T01:58:20","date_gmt":"2025-03-24T20:28:20","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=31471"},"modified":"2025-04-16T12:13:58","modified_gmt":"2025-04-16T06:43:58","slug":"equalization-levy","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/equalization-levy\/","title":{"rendered":"Equalization Levy"},"content":{"rendered":"<h2>Equalization Levy Latest News<\/h2>\n<p>The central government has proposed to abolish the Equalisation Levy, or digital tax, on online advertisements, aiming to benefit advertisers on platforms like Google and Meta.\u00a0<\/p>\n<h2>About Equalization Levy<\/h2>\n<ul>\n<li>The Equalisation Levy was introduced in India in 2016, with the intention of <strong>taxing the digital transactions<\/strong> i.e. the <strong>income accruing to foreign e-commerce companies from India.\u00a0<\/strong><\/li>\n<li>It is aimed at taxing <strong>business-to-business transactions.\u00a0<\/strong><\/li>\n<li>It is also often referred to as the <strong>&#8220;Google Tax&#8221;<\/strong><\/li>\n<li>It is a <strong>direct tax,<\/strong> which is <strong>withheld at the time of payment by the service recipient.\u00a0<\/strong><\/li>\n<li>The <strong>two conditions to be met <\/strong>to be liable to equalisation levy:\n<ul>\n<li>The <strong>payment <\/strong>s<strong>hould be made to<\/strong> a <strong>non-resident service provider;<\/strong><\/li>\n<li>The<strong> annual payment<\/strong> made to one service provider <strong>exceeds Rs.1,00,000 in one financial year.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li>Currently, <strong>not all services are covered<\/strong> under the ambit of equalisation Levy. The following services are covered:\n<ul>\n<li><strong>Online Advertisement Services <\/strong>(Effective from June 1, 2016).<\/li>\n<li>Any provision for <strong>digital advertising space or facilities<\/strong>\/services or selling goods to Indian residents, or users accessing services\/goods through Indian IP addresses (Effective from April 1, 2020).<\/li>\n<li>It was also mentioned during the introduction of the levy that as and when any other services are notified, these will be included with the aforesaid services.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Equalisation Levy Exclusion:<\/strong>\n<ul>\n<li>The <strong>non-resident service provider has a permanent office in Indi<\/strong>a, and the <strong>requested service is linked to that <\/strong>permanent office\/establishment.<\/li>\n<li>The total consideration amount to be paid for the specific service payable or received is <strong>less than Rs.1 lakh.<\/strong><\/li>\n<li>The <strong>service <\/strong>described is<strong> not intended to be used to pursue a profession<\/strong> or work.<\/li>\n<li>An <strong>exemption <\/strong>under section 10(50) of the Act is <strong>provided to avoid double taxation <\/strong>for any income arising from specified services provided on which equalisation levy is chargeable.<\/li>\n<li><strong>An income chargeable <\/strong>to tax <strong>as fees or royalties for technical services<\/strong> will not be included as income for the equalisation levy purposes.<\/li>\n<\/ul>\n<\/li>\n<li><strong>The tax rate under the equalisation levy depends on the type of service or transaction.<\/strong>\n<ul>\n<li>For specified digital services, such as <strong>online advertising<\/strong>, the rate is <strong>6% of the gross consideration.<\/strong><\/li>\n<li>For <strong>e-commerce transactions, <\/strong>such as online sale of goods or services, the rate is <strong>2% of the gross consideration.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Equalization Levy FAQs<\/h2>\n<p><strong>Q1<\/strong>. What is the main objective of the Equalisation Levy?<\/p>\n<p><strong>Ans<\/strong>. To tax digital transactions and income earned by foreign e-commerce companies from India<\/p>\n<p><strong>Q2<\/strong>. When was the Equalisation Levy introduced in India?<\/p>\n<p><strong>Ans<\/strong>. 2016<\/p>\n<p><strong>Q3<\/strong>. What type of tax is the Equalisation Levy?<\/p>\n<p><strong>Ans<\/strong>. It is a Direct Tax.<\/p>\n<p><strong>Source<\/strong>: <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/government-to-abolish-equalisation-levy-on-online-ads-from-april-1\/articleshow\/119432434.cms\" target=\"_blank\" rel=\"nofollow noopener\">TOI<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s Equalization Levy, introduced in 2016, taxes digital transactions and income earned by foreign e-commerce companies from Indian markets.<\/p>\n","protected":false},"author":5,"featured_media":31472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-31471","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/31471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=31471"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/31471\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/31472"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=31471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=31471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=31471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}