Equalisation Levy Tax in India & its effects on Real Estate Digital Marketing

Sumant Goenka explain the Equalisation Levi Tax rules and how it affects Real Estate Digital Marketing – CBDT notification 38/2016.

What is Equalisation Levy tax?

June 1 onwards an Equalisation Levy of 6% will be deducted by a business entity in India that makes payments exceeding Rs. 1 Lakh in the aggregate in a financial year to a non-resident service provider for specified services.

What are the services that fall under this rule?

Specified services under this rule cover online advertisements, provision for digital advertising space or any other facility or services for the purpose of online advertisements. This list is expected to expand soon.

Why Equalisation Levy?

This very recent move is aimed at technology firms that gain online ads through Google and Facebook. This will bring them under India’s tax net. A similar tax structure is already in place with Organisation for Economic Cooperation and Development (OECD) nations and European countries.

What is the impact over the Indian companies and Individuals?

The move can impact anyone and everyone with an online setup and who uses Facebook or Google for marketing.

What if a Company or Individual fails to deduct this tax?

In such case the firm or the business owner won’t be allowed to consider the expenses while calculating the taxable profits, which might income their taxable income and liability.

For further details please enquire with Sumant Goenka  on email sumant@axiomestates.com