India to scrap 6% equalisation levy on digital ads starting April 1, 2025

This decision, announced in the Finance Bill 2025-26, will benefit global tech companies like Google, Meta, and Amazon by reducing their tax burden and operational costs in India.

Starting April 1, 2025, India will abolish the 6% equalisation levy on online advertisements. This levy, introduced in 2016, primarily targeted foreign digital companies such as Google, Meta, and Amazon, requiring them to pay tax on online advertising services provided to Indian residents.

The government’s decision to remove this levy aims to address concerns raised by foreign nations, which viewed the tax as discriminatory against foreign companies. This move is expected to benefit advertisers on digital platforms by reducing costs and simplifying compliance.

In addition to abolishing the 6% levy, India had previously withdrawn the 2% equalisation levy on e-commerce operators, effective August 1, 2024. This earlier change aimed to ease compliance burdens and align with global taxation standards.

These adjustments reflect India’s efforts to reform its digital taxation framework, balancing domestic revenue needs with international trade relations and commitments to global tax standards.