Govt seeks to drop 6% equalisation levy on online ads

The government on Monday proposed scrapping the 6 per cent equalisation levy on online advertising services provided by non-resident entities, a move that would benefit companies like Google, Meta, and X.

- MONIKA YADAV

The proposal is part of 59 amendments to the Finance Bill, 2025, introduced by Minister of State for Finance Pankaj Chaudhary in the Lok Sabha. It comes ahead of talks on a bilateral trade deal between New Delhi and Washington and the imposition of reciprocal tariffs by American President Donald Trump on April 2.

However, the proposed amendments also seek to remove the corresponding income-tax exemption under Section 10(50), bringing such revenue under regular taxation. The move follows the government's earlier decision to eliminate the 2 per cent levy on ecommerce transactions from August 1, 2024.

While the 2 per cent levy drew more criticism from the US, the Indian government — in the anticipation of further tariff retaliation by the US — appears to be taking a more accommodative stance, said Amit Maheshwari, tax partner at AKM Global.