TDS Policy

TDS Policy

In line with the provisions contained in Finance Act, 2023 and in accordance with the relevant provisions of Income Tax Act, 1961 the company shall deduct TDS at the rate as may be applicable from time to time.

  • a)  All withdrawals and / or balance(s) in the user account shall be subject to deduction of TDS under the provisions of the Income Tax Act, 1961.
  • b)  TDS will be deducted at 30% on (i) net winnings comprised in any withdrawal from the user account, and (ii) remaining amount of net winnings in the user account at the end of the financial year. Rate of TDS as well as the manner of computation thereof shall be as per applicable legal provisions and are subject to change without any prior notice or intimation to the user

For Simplification and illustration purposes appended herewith is the formulae which shall be applicable:

For withdrawals during the year, TDS shall be applicable on that portion of the withdrawal which is Net Winnings. Net Winnings in case of Withdrawal is calculated as A – B – C – D

Where,

  • A = Aggregate withdrawals from the user account during the current year till the date of withdrawal, other than any amount, by whatever name called, not in the nature of winnings from playing online game paid by the online gaming intermediary to the user account
  • B = Aggregate amount deposited in the user account during the current year upto the date of withdrawal
  • C = Balance in the user account at the beginning of the current year excluding the bonus given to users
  • D = Winnings comprised in earlier withdrawals made from the user account in the current year, on which TDS was deducted in accordance with the provisions of the section 194 BA
    Note: In case the TDS applicable on net winnings at the time of withdrawal is lower than the TDS already paid during the current year, no TDS will be applied, and the user may claim the refund of the said TDS at the time of filing their annual returns with Income Tax.
  • We reserve our right to modify / change / amend the above terms in the event of any change in applicable law, any amendment to the legal provision, issuance of clarification by the authorities, pronouncement of any relevant court judgement, etc.

Some scenarios to illustrate the impact of the new TDS rules are provided below:

Scenario 1

If Net winnings are less than or zero, then TDS is not applicable.

Example:

  • Total withdrawal in the financial year till date (A) = ₹ 10,000 [₹ 8,000 already withdrawn + ₹ 2,000 requested today]
  • Total deposits made in the financial year till date (B) = ₹ 8,000
  • Balance in user account at the beginning of current financial year (C) = ₹ 2,000
  • Withdrawals on which TDS has already been deducted in the current financial year (D) = ₹ 0
  • Net Winnings = A - B – C – D = ₹ 0
  • Withdrawal requested= ₹ 2,000
  • Amount credited to your bank account = ₹ 2,000

In this scenario your net winnings are 0, so TDS is not applicable on your withdrawal.

Scenario 2

If Net winnings are greater than zero, then TDS is applicable.

Example:

  • Total withdrawal in the financial year till date (A) = ₹ 38,000 [₹ 26,000 already withdrawn + ₹ 12,000 requested today]
  • Total deposits made in the financial year till date (B) = ₹ 15,000
  • Balance in user account at the beginning of current financial year (C) = ₹ 15,000
  • Withdrawals on which TDS has already been deducted in the current financial year (D) = ₹ 1000
  • Net Winnings = A - B – C – D = ₹ 7,000
  • Withdrawal requested= ₹12,000
  • TDS deducted = 30% x Net Winnings = ₹2,100
  • Amount credited to your bank account = ₹ 9,900

In this scenario your net winnings is ₹ 7,000, which is greater than 0, so TDS of ₹ 2,100 is deducted from your requested withdrawal and ₹ 9,900 is credited to your bank account.

Scenario 3

TDS was deducted on net winnings during the financial year, however, net winnings have reduced since

For Example:

On 25th June 2023
  • Total withdrawal in the financial year till 25th June 2023 (A) = ₹ 20,000
  • Total deposits made in the financial year till 25th June 2023 (B) = ₹ 5,000
  • Balance in user account at the beginning of current financial year (C) = ₹ 10,000
  • Withdrawals on which TDS has already been deducted in the current financial year (D) = ₹ 0
  • Net Winnings = A - B – C – D = ₹ 5,000
  • Withdrawal requested= ₹20,000
  • TDS deducted = 30% x Net Winnings = ₹1,500
  • Amount credited to your bank account = ₹ 18,500

On any day after 25th June 2023 before the end of FY 2024

  • If Net winnings decreases to ₹ 3,000
  • Withdrawal requested = ₹ 100
  • TDS on net winnings = 30% x ₹ 3,000 = ₹ 900
  • However, TDS of ₹ 1,500 has already been deducted till date & the user now has a lower TDS liability.
  • In this case, user may claim a tax refund when filing their yearly income tax