Government proposes removal of 6% equalisation levy on online ads

In a move aimed at easing the financial burden on digital advertisers, the government has proposed eliminating the 6% equalisation levy on online advertising. According to a report by CNBC-TV18, this tax, introduced in 2016, applies to payments made by Indian businesses to foreign digital ad platforms.

If approved, the proposal is expected to provide relief to advertisers running campaigns on major global platforms like Google and Meta. The decision is anticipated to benefit startups, small enterprises, and large corporations by reducing advertising costs.

Meanwhile, Finance Minister Nirmala Sitharaman is set to present the Finance Bill 2025 in the Lok Sabha today for discussion and approval. This bill plays a crucial role in implementing the government’s financial policies for the 2025-26 fiscal year. Details regarding the timeline for rolling out the tax removal are still awaited.

Initially introduced under the Finance Act of 2016, the equalisation levy was applied to payments for online advertisement services and digital ad space. In 2020, its scope was broadened under the Finance Act, extending it to e-commerce supply and services from April 1, 2020, onwards.