epf image.png

EPF Interest Rate 2024-25: Current & Historical Rates, EPF Calculator

3.1.png

Are Digital Payments Hurting Your Wallet?

medium_image.webp

small_image.webp

thumbnail_image.webp

image.webp

20 Side Income Ideas in India to Earn Extra Money with a Full-Time Job

Entertainment tax can make your movies, music festivals, and concert tickets more expensive. Here’s everything you need to know about it.

What is Entertainment Tax, its Features and Rates?

Home Page

Guides

Personal Finance

"What is Entertainment Tax, its Features and Rates?"

Anoop Menon

From budgeting to expenses management and everything in between

<p>
    Going to the theatre to watch the latest movie or to the stadium to cheer for your favourite cricket team seems like a good weekend plan. However, did you know you must also pay entertainment taxes on these tickets? This compulsory tax liability is payable over and above the ticket’s asking price.
   </p><p>
    Wondering if an entertainment tax is direct or indirect? How is it collected? How much do you have to pay? Keep reading to find the answers to these questions.
   </p><h2>
    <strong>
     What is Entertainment Tax?
    </strong>
   </h2><p>
    Entertainment tax is an indirect tax applicable to all commercial entertainment activities like film and music festivals, classical shows, cricket matches, etc. The government
    <a href="https://cbic-gst.gov.in/pdf/press-release/press-release-entertainment-services.pdf" target="_blank">
     imposes this tax
    </a>
    to collect revenue from such activities, which is used for the entertainment sector's general development.
   </p><h2>
    <strong>
     Salient Features of Entertainment Tax
    </strong>
   </h2><p>
    Entertainment tax in India has a colonial legacy since the concept was introduced during British Rule to limit public gatherings. In post-independent India, entertainment tax has been subsumed in the Indian constitution. Article 246 outlines the provisions for entertainment tax administration and collection.
   </p><p>
    Here are some of the prominent features of the tax:
   </p><ul role="list">
    <li>
     The Indian state governments are responsible for levying and collecting entertainment tax.
    </li>
    <li>
     This type of indirect tax is levied on various forms of entertainment and gets added to the final ticket prices to be covered by customers.
    </li>
    <li>
     Since it came under the state government’s jurisdiction, the rates in the pre-GST era varied.
    </li>
    <li>
     Under GST, paid television entertainment services like DTH and cable attract an 18% entertainment tax.
    </li>
    <li>
     Entertainment tax in India is applicable on:
    </li>
   </ul><p>
    *Exhibitions
    <br>
    *Celebrity stage shows
    <br>
    *Theatre shows
    <br>
    *Arcades
    <br>
    *Sports events
    <br>
    *Amusement parks
    <br>
    *Casino
    <br>
    *Race
   </p><ul role="list">
    <li>
     The state government might issue certain exemptions under the tax for cultural events like ones organised by charitable institutions or for children's education.
    </li>
    <li>
     The Indian government also offers an entertainment tax allowance for public sector employees. Under Section 16 (ii), the entertainment tax allowance in income tax provision states that government employees can claim the lowest of the following as a deduction:
    </li>
   </ul><p>
    *20% of their basic salary
    <br>
    *Rs. 5,000
    <br>
    *Actual entertainment allowance amount received during the fiscal year.
   </p><h2>
    <strong>
     Debunking Entertainment Tax Rates under GST
    </strong>
   </h2><p>
    As mentioned earlier, before GST was introduced, entertainment tax in India varied from state to state. Tax rates ranged from 0%-110% depending on the concerned state’s tax policies. Here’s a list of the applicable entertainment tax rates in some of the Indian states:
   </p><p>
    These high taxation rates made entertainment activities unaffordable to most of the Indian population. However, this has changed with GST subsuming entertainment tax within its purview. Now, the following uniform tax rates apply to various entertainment sources:
   </p><p>
    <em>
     *Note: Some Indian states charge additional taxes over and above this set GST rate.
    </em>
   </p><h2>
    <strong>
     Conclusion
    </strong>
   </h2><p>
    The impact of GST on the entertainment sector has been far-reaching. For the end-customer or movie-goers in states like Jharkhand, where the prior taxation rate was high, GST has helped. However, the GST replacing entertainment tax in states like Punjab has made entertainment costlier.
   </p><p>
    Whether costly or pocket-friendly, budgeting your entertainment expenses will be easy when you have the Fi Money app. This money management platform will help you Know Your Money &amp; Grow Your Money.
    <a href="https://fi.money/features/ask-fi" target="_blank">
     Fi's AI-powered
    </a>
    Analyser can provide insights to help track your expenses: Analyse your spends by Merchants/Brands, Categories (like Food, Entertainment) &amp; by Time (daily/monthly spends). FYI: Fi also provides thoughtful, non-intrusive nudges to help you maximise your savings/investments. Want to know your credit score? The Insights Hub on our Analyser can do that too. This is why over 2.5 million people trust Fi to get a 360-degree view of their money.
   </p><h2>
    <strong>
     Frequently Asked Questions
    </strong>
   </h2><h3>
    <strong>
     1. What is entertainment tax, for example?
    </strong>
   </h3><p>
    An entertainment tax is a tax that’s imposed on commercial entertainment events by the state government. For instance, you have to pay an entertainment tax (28% under GST) when booking movie tickets.
   </p><h3>
    <strong>
     2. What is entertainment tax in income tax?
    </strong>
   </h3><p>
    Entertainment tax allowance is a deduction government employees can claim while filing their yearly taxes. As per Section 16 (ii), government employees can claim the lowest of the following as a tax deduction under the category:
   </p><ul role="list">
    <li>
     20% of their basic salary
    </li>
    <li>
     Rs. 5,000
    </li>
    <li>
     Actual entertainment tax amount paid during the fiscal year
    </li>
   </ul><h3>
    <strong>
     3. What type of tax is entertainment tax?
    </strong>
   </h3><p>
    Entertainment tax is an indirect tax applicable to various entertainment services. This tax is levied and collected by state governments in India.
   </p><h3>
    <strong>
     4. Is entertainment tax a direct tax?
    </strong>
   </h3><p>
    No, an entertainment tax is not a direct tax. It is a form of indirect tax where the tax liability is passed on to the end customer. So, the tax amount gets added to the final ticket prices payable by the customer
   </p>

What is Entertainment Tax, its Features and Rates? | Fi Money

Fi.money