NEW DELHI: The government on Monday announced rules for equalisation levy — or ‘Google tax ’ for taxation of payments for international digital services by Indian businesses — that was introduced in the Budget.The specified services covered by the levy include online advertising, provision for digital advertising space and any other service to be notified by government. The rules come into effect from June 1.Finance minister Arun Jaitley had announced the equalisation levy, emanating out of OECD's Base Erosion and Profit Sharing project, on payments made by businesses for specific digital services to a non-resident entity not having permanent establishment in India The idea is to indirectly tax internet giants for money they make from Indian advertisers, by imposing a levy on the payments these advertisers make.The levy was structured based on recommendations of a panel set up the Central Board of Direct Taxes and included industry representatives.Tax experts say businesses will have to start preparing now that the rules have been announced.“Equalisation levy made various players sit up and take notice, especially since this is India's first step to tax digital economy , and one of the first few internationally,” said Rakesh Nangia, managing partner at Nangia & Co.“Now with rules in place, people need to start taking action, since the statement of specified services procured starting June 1, 2016 has to be reported in the statement to be furnished by June 30, 2017,” he said.Nangia said rules provide clarity as to how an assessee can appeal against the order of the assessing officer.From June 1, an equalisation levy of 6% will have to be deducted by a business entity in India which makes payments exceeding Rs 1 lakh in the aggregate in a financial year to a non-resident service provider for specified services.For now, specified services cover online advertisements, provision for digital advertising space or any other facility or service for the purpose of online advertisements. This list will expand soon.The move is aimed at technology firms that gain on online ads. This will bring them under India's tax net. A similar tax structure is already in place Organisation for Economic Cooperation and Development (OECD) nations and European countries.The move impacts anyone and everyone with an online setup and who use Facebook or Google for marketing.Then the firm or the business owner won't be allowed to consider the expenses in calculating taxable profits, which will increase their taxable income and liability.