Finance Bill 2025 / Meta and Google, which earn money from digital ads, will print big money

Finance Bill 2025: The Government of India has made an important amendment in the Finance Bill 2025, in which the tax burden on global companies like Google and Meta, which earn money from Digital Ads, has been reduced. The biggest news in this amendment is that the 6% Equalisation Levy has been removed, which is going to directly benefit these companies. Let us understand what this amendment is, why it is so important, and how it will benefit these digital companies.

What was Equalisation Levy?

Equalisation Levy was a type of tax introduced by the Government of India in 2016. This tax was levied on foreign digital companies that offered digital services (such as ads, online shopping, cloud services) to Indian users. Its main objective was to tax these companies in the same way as Indian companies are taxed at the local level.

Through 6% Equalisation Levy, foreign companies like Google, Meta, Amazon used to earn money from Indian advertisers through digital ads. This 6% tax was levied on those companies. It was implemented directly so that these companies are brought into the Indian tax system and tax is imposed on the business done by them in India.

How will these companies benefit?

Tax burden will be reduced: After this amendment, these companies will now have to pay less tax on the income from their digital services in India. This will reduce their total tax bill and they will be able to use a larger part of their income for their investment or growth.

Expansion of Indian operations: The reduction in tax will give these companies an opportunity to further expand their Indian operations. They can now bring more flexibility in the prices of their services and strengthen their hold in the Indian market.

New challenges for local companies: Earlier, due to Equalisation Levy, foreign companies used to suffer losses to some extent, due to which local companies got an advantage in the competition. Now that the tax has been reduced, foreign companies will be able to offer their services in a better way, which can bring about a big change in the Indian digital market.

Increasing investment: The investment of these companies in the Indian market can increase. This can lead to more investment and growth in digital ads, e-commerce, and other sectors, which will also benefit the Indian economy.