TDS Rules

As per the amendment in Section 194BA of the Income Tax Act proposed in the Budget Session of 2023, all online gaming intermediaries must deduct a tax of 30% on the users’ net winnings made by playing real money online games

• Net winnings = Total withdrawals - (Total deposits in a financial year + Opening balance)
• Opening balance = Deposits of the previous financial year + withdrawable winnings of the previous financial year which did not suffer TDS

Guidelines:

• 30% TDS will be applicable only to your net winnings and not your deposits
• The TDS will be deducted at the time of withdrawal & at the end of the financial year

How is TDS calculated?

If your net winnings are positive (withdrawals are more than deposits) then a 30% TDS will be applicable to your withdrawal. A financial year is counted from 1st April to 31st March

Example 1:

For example it is 1st April and you have not made any deposits yet. Your opening balance is ₹5000 and now you want to withdraw ₹3000

Example 2:

In case you deposit ₹2000 in the current FY and your opening balance is 7000. You have previously withdrawn ₹6000 and now you wish to withdraw ₹5000

Example 3:

If you plan to make a withdrawal after the above transaction, TDS will be applicable only if the withdrawal amount exceeds your total deposits