The Indian government has proposed abolishing the 6% equalisation levy on online advertisements as part of amendments to the Finance Bill, 2025. The move is expected to benefit major U.S. tech firms and ease trade tensions with the United States, which has long raised concerns over India’s high tariffs.
Introduced in 2016, the equalisation levy—often called the “Google tax”—applies to payments exceeding ₹1 lakh annually to non-resident service providers for digital ads. It requires global tech giants like Google, Meta, and Amazon to withhold and remit the tax to the Indian government.
Experts believe this decision signals India’s willingness to adopt a more accommodative stance as it negotiates a potential trade deal with the U.S. The removal of the levy, effective from April 1, 2025, aligns with global efforts to streamline digital taxation and foster smoother trade relations.
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