TDS Policy
What is the TDS policy?
From 1st April'23, Income Tax department has introduced a new TDS section for Winnings from online games i.e., 194BA.
The net winnings are calculated at the time, when you place a request for withdrawal (or at the year-end on the closing balance). TDS is calculated @ 30% on the net winnings comprising of Withdrawal/Closing Balance at year-end.
Important points:
- TDS will be deducted at the time of withdrawal
- TDS will be applicable only on net winnings during withdrawals and not deposits
- Your deposit and withdrawal ledger will become 0 at 00:00 hours on 1st April of every financial year (FY)
- Net winnings = [Total withdrawals in FY - (Total deposits in FY + Net winnings which have incurred TDS during the FY + Opening balance)]
How is TDS calculated on Taj Games?
The TDS will be deducted at the time of withdrawal and at the year end
Financial Year (FY) is from 1st April to 31st March every year
Your deposit and withdrawal ledger will become 0 at 00:00 hours on 1st April of every financial year.
Net winnings = [Total withdrawals in FY - (Total deposits in FY + Net winnings which have incurred TDS during the FY + Opening balance as of 1st April 00:00 hours)]
If your net winnings at the time of making a withdrawal is positive (greater than 0), 30% TDS will be applicable on any withdrawn amount.
Let us understand with a few examples:
Scenario 1
On 1st April, you have Rs. 7,000 in your winnings balance and Rs. 8,000 in deposit balance. Now you want to withdraw Rs. 7,000 on 3rd April. In such a situation, no TDS will be applied. The calculation will be as below:
| GTotal withdrawals in FY | Rs. 7,000 |
| Total deposits in FY | Rs. 0 |
| Opening deposit balance | Rs. 8,000 |
| Net winnings | Rs. 7,000 – Rs. 8,000 = Rs. -1,000 |
| Net winnings which have incurred TDS in FY | Rs. 0 |
| TDS @ 30% on net winnings | Rs. 0 |
Scenario 2
Now consider that you deposit Rs. 3,000 in the current FY. Your opening deposit balance was Rs. 8,000 and you have already withdrawn Rs. 7,000. Now you want to withdraw Rs. 5,000 more. The calculation will be as below:
| Total withdrawals in FY | Rs. 7,000 + Rs. 5,000 = Rs. 12,000 |
| Total deposits in FY | Rs. 3,000 |
| Opening deposit balance | Rs. 8,000 |
| Net winnings | Rs. 12,000 – (Rs. 8,000 + Rs. 3,000) = Rs. 1,000 |
| Net winnings which have incurred TDS in FY | Rs. 0 |
| TDS @ 30% on net winnings | Rs. 300 |
In the above case, you could have withdrawn Rs. 4,000 without tax instead of Rs. 5,000. However, since you are withdrawing Rs. 5,000, Rs. 300 will be deducted from the remaining Rs. 1,000 and you will receive Rs. 4,700 in your bank account.
Scenario 3
If TDS has been applied to your previous withdrawals, then no TDS is applicable on withdrawals till your net winnings exceed the amount for which you have already paid TDS.
| Total withdrawals in FY | Rs. 20,000 |
| Total deposits in FY | Rs. 6,000 |
| Opening deposit balance | Rs. 8,000 |
| Net winnings | Rs. 20,000 – (Rs. 8,000 + Rs. 6,000) = Rs. 6,000 |
| Net winnings which have incurred TDS in FY | Rs. 6,000 |
| TDS @ 30% on net winnings | Rs. 0 |
If you try to withdraw Rs. 5,500, no TDS will be deducted. You can withdraw up to Rs. 6,000 without any TDS.
However, if you wish to withdraw Rs. 10,000, TDS will be charged on the remaining Rs. 4,000 @ 30% which is Rs. 1,200. Post it, you will receive Rs. 8,800 in your bank account.
What if you end up paying extra TDS?
At the end of the financial year 23:59 hours on 31st March, your final TDS will be calculated depending on the financial year net winnings.
Since the winnings earned from Online Gaming are chargeable to tax @ 30%, you need to file your ITR request and the total TDS deducted can be adjusted against the winnings liable for tax. If any excess TDS is deducted, the same can be claimed back while filing ITR request.
How can you get the TDS Certificate?
We deduct TDS and deposit the same with the Government. If you have provided your PAN Card, you can view the TDS deduction details in your 26AS (which is updated every quarter).