As per the Finance Act 2023, all Real Money Gaming Apps are mandated to deduct tax at the rate of 30% on users’ Net Winnings at the time of withdrawal or on 31st March (i.e. end of the Financial Year).
FAQ - Tax deducted at Source- TDS
-
How can I get my Tax Certificate to file IT Returns?
- Tax Certificates will be issued within 1 month from the last date of filing TDS returns for every quarter.
-
Will my Opening A/c Balance be considered if I want to make a withdrawal at the start of the new Financial Year (April 2023)?
Let’s consider the following table as an example -
Opening A/c Balance
as on 1st April 2023
Total Deposit Total Withdrawal ₹ 1500 ₹ 2000 ₹ 3000 Tax is deducted on Net Winnings.
At the start of the Financial Year (1st April 2023), if there’s an Opening Balance, Net Winnings is calculated as
= (Total Withdrawals) - (Total Deposits) - (Opening Balance)
= ₹ 3000 - ₹ 2000 - ₹ 1500
= - ₹ 500
As the Net Winning here is negative, there will be no tax deduction. And so, your withdrawal amount post tax deduction would be ₹ 3000 - ₹ 0 = ₹ 3000 -
Will tax be deducted if I withdraw an amount lesser than my total deposits?
If your total withdrawal is less than your deposit, no tax will be deducted.
Example -
Total Deposit Total Withdrawal ₹ 4000 ₹ 2000 Here, Net Winnings = Total Withdrawal - Total Deposit
= ₹ 2000 - ₹ 4000
Net Winnings = - ₹ 2000As Net Winning is negative, there will be no tax deduction.
-
How is tax calculated on 'Net Winnings'?
Net Winnings is the difference between the total amount withdrawn and the total amount deposited in a financial year. Example -
Total Deposit Total Withdrawal ₹ 2000 ₹ 3000 Here, Net Winnings = Total Withdrawal - Total Deposit
= ₹ 3000 - ₹ 2000
Net Winnings = ₹ 1000
Tax is calculated at the rate of 30% of Total Net Winnings at the time of Withdrawal. Let’s take the above example for reference.
Here, the Net Winnings is ₹ 1000. Tax = 30% of ₹ 1000 = ₹ 300 -
What is ‘Net Winnings’?
Net Winnings is the difference between the total amount withdrawn and the total amount deposited in a financial year. Example -
Total Deposit Total Withdrawal ₹ 2000 ₹ 3000 Here, Net Winnings = Total Withdrawal - Total Deposit
= ₹ 3000 - ₹ 2000
Net Winnings = ₹ 1000
-
What are the latest changes to TDS (Tax Deducted at Source) on online gaming apps?
-
How can I get my Tax Certificate to file IT Returns?
- Tax Certificates will be issued within 1 month from the last date of filing TDS returns for every quarter.
-
I play on both RummyCircle & My11Circle. How will this impact me?
- Players playing all games offered by Games24x7 have a common wallet across games. So, for taxation, the entry fee paid for all games will be deducted from the winnings from all games. The balance amount will be considered for taxation at the rate of 30%.
-
What is TDS?
TDS stands for 'Tax Deducted at Source' which we are legally obliged to deduct tax at source (“TDS”) at the time of withdrawal or the end of the Financial Year.
As per the Finance Bill passed by the Govt. of India, new tax laws are applicable on Online Gaming apps from April 1st, 2023. As per the law, Platforms offering Online Games are required to deduct tax at source (“TDS”) at the time of withdrawal or the end of the Financial Year. TDS shall be levied at the rate of 30% for all the net winnings of a Player.
Here, net winnings is the difference between the total amount withdrawn and the total amount deposited in a financial year.
-
When will the tax be deducted?
-
Tax will be deducted on Net Winnings at the time of withdrawal or on 31st March (i.e. at the end of the Financial Year). If tax is deducted on positive Net Winnings on withdrawals, tax will not be deducted again on the same Net Winnings on 31st March.
-
Tax will be deducted on Net Winnings at the time of withdrawal or on 31st March (i.e. at the end of the Financial Year). If tax is deducted on positive Net Winnings on withdrawals, tax will not be deducted again on the same Net Winnings on 31st March.
-
If my ‘Net Winnings’ go down during the year, can I get a refund of the TDS already deducted?
- Tax on Net Winnings at the time of the withdrawal that are deducted are paid to the income tax department for the credit of the player. Players can file their returns with the income tax department and claim refunds subject to the Player’s overall tax liability. Games24x7 will be issuing the tax deduction certificates showing the tax deducted for the player. However, Games24x7 will not be able to refund the excess TDS from our end directly to any Player.