tax

6. ANGEL TAX

• Angel tax refers to the income tax (30.6 %) imposed on any unlisted company (usually start-up enterprises) in 

receipt of investment which is above the fair market value. Such investment is treated as income from other 

sources for the tax purpose. This tax was introduced in 2012 in the form of Section 56 (2) of the Income Tax Act 

to plug money laundering practices.

• Earlier, angel tax provisions were applicable only for investments received from resident investors. However, 

Finance Bill 2023 has extended its applicability to non-resident investors as well.

7. WINDFALL TAX

• Windfall tax is a higher tax levied by the government on specific industries when they experience unexpected 

and above-average profits. 

• The Government imposes this tax when they notice a sudden rise in an industry’s revenue due to external 

incidents that they are not responsible for. 

○ E.g., Windfall tax imposed on upstream oil companies — ONGC, Oil India and GAIL- when they declared all-time 

high net profit in the fiscal year 2022 due to skyrocketing of oil prices following Russia-Ukraine war. 

• It is usually a one-time tax imposed retrospectively, over and above the normal tax rate.

• Some individual taxes—such as inheritance tax or taxes on lottery or game-show winnings—can also be 

construed as a windfall tax.

8. GST ON ONLINE GAMING

The Goods and Services Tax (GST) Council decision to levy a uniform 28 per cent tax on full face value for online gaming 

has come into effect from 1st of October, 2023.TAX ON ONLINE GAMING

• The GST Council had imposed 28% GST on online gaming, casinos and horse racing on the full face value.

• Earlier, the GST regime differentiated online games based on skills versus chance. For a game of skills, such as

esports, puzzles, and some card games, an 18% GST was chargeable. Whereas, for a game of chance, including

gambling at casinos, a 28% GST was chargeable.

• GST law was amended to include online gaming under its scope as currently it falls under actionable claims.

ABOUT ONLINE GAMING

Online gaming refers to games that can only be played with an internet connection. Different types of online games

are:

• E-sports: Well organised electronic sports which include professional players).

• Fantasy sports: Choosing real life sports players and winning points based on the players’ performance in a

match.

• Skill Based: Mental skill.

• Chance Based: Based on random activity like roll of a dice) online games.