TDS

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TDS Policy


Effective from April 1' 2023, the following TDS policy will apply to all the users:

1) The company will deduct TDS at a rate of 30% on the net winnings of the users. TDS will be deducted in two instances:

  • When the user withdraws/redeems any amount from their account during the financial year, TDS would be levied on the positive net winnings comprised in the amount being withdrawn at the time of each withdrawal post 1st April' 2023; and / or
  • At the end of the financial year, TDS would be levied on the total positive net winnings lying in their account as on 31st March, which shall not include the net winnings on which tax has already been deducted at source during the financial year.

2) 'Net winnings in a game' means the total amount won by the user in a game minus the total entry/joining fee paid in that game. 'Net winnings' in any period means the sum of net winnings in all games played in that period.

3) No carry forward of net winnings is allowed to the next financial year.

4) Users must provide their PAN details and a copy of their PAN card before their first withdrawal, as required by the Terms & Conditions. Failure to provide these details will result in the inability to withdraw winnings. If users fail to provide valid PAN details and a copy of their PAN card by the end of the financial year, the company will deduct tax at source on positive net winnings as of the end of the financial year and remit the amount to the government authorities on a no- name basis.

5) This Policy, including the definition of net winnings, has been prepared on the basis of the Company's understanding of the provisions with respect to income from online games introduced by the Finance Act, 2023 and is subject to change without notice if any modification in the law or in understanding is brought by the appropriate authorities.

6) The Company reserves the right to amend / modify this Policy at any time in its sole discretion without giving any prior notice to the users.

According to the Finance Bill that the Indian government approved, new tax regulations will take effect on online gaming applications on April 1, 2023. The law mandates that platforms that offer online games must deduct tax at source ("TDS") either at the time of withdrawal or at the end of the financial year. TDS will be assessed at a rate of 30% on each player's net winnings to the extent the net winnings are withdrawn. Net winnings in this context refer to the sum of all winnings minus the all the entry fee paid by a player in the year.

No, You will not have to pay TDS at the end of the game /tournament even if you win more than ₹10000. However this winning will be counted for calculation of Net winnings and TDS will apply at the time of redeem as per policy.

'Net winnings in a game' means the total amount won/lost by the user in a game minus the total entry/joining fee paid in that game. 'Net winnings' in any period means the sum of positive and negative net winnings in all games for that period. On April 1, 2023 every user will start Net Winnings = 0.

In simpler terms, Net winnings = Profits from the games you won minus losses in the games where you didn't win.

For example

Game Entry Fee (Rs) Winnings (Rs) Net Winnings in Game (Rs)
1 100 500 400
2 100 0 -100
3 100 400 300

In the above example user has a profit of 400 Rs in Game 1, and loss of 100 Rs in Game 2 and Profit of 300 Rs in Game 3. Net winnings at the end of Game 3 = 400 - 100 + 300 = 600 Rs

TDS is calculated as 30% of the Net Winnings if the Net winnings are greater than Zero. TDS is Zero is the Net Winnings are Negative.

Taking the above example, TDS will be 30% of 600 = 180 Rs.

TDS is deducted at the time of processing a Redeem request based on the Net Winnings at that time of Redeem Request.

If the Net Winnings are greater than Zero at the time of withdrawal, TDS will be computed as 30% of Net Winnings or Withdrawal amount whichever is lower. The TDS amount will be deducted from the Withdrawal request and the balance amount will be transferred to the user.

Continuing with the example in Question # 2 -

  • The player had net winnings of 600 Rs and if the player places a withdrawal request for 600 Rs, TDS will be 180 Rs and 600-180=420 Rs will be credited to the players account.
  • If the Redeem request is for 500 Rs, TDS for the user will be on 500 Rs (Since redeem amount is less than Net winnings). Net Payment to the user is 500-150= 350 Rs.

At the end of the Financial year - If there is a pending tax liability, the outstanding TDS amount will be deducted from the player's wallet.

Any net winnings on which TDS is already paid at the time of any earlier withdrawals in that financial year, would be reduced while computing net winnings at the time of withdrawal.

If your net winnings reduce or become negative at the end of the financial year, you can file your tax returns and claim refunds from the income tax department depending on your overall tax liability. For more information, please contact your tax adviser.

A23 will provide the TDS Certificates so that you can file your tax returns. However, A23 will not refund any excess TDS to the players.

As per the new policy, there is no deduction on any withdrawal until 31 March 2023. This balance will be carried forward in your account on 1st April 2023. For any redeems placed after 1st April 2023, TDS will be calculated on Net Winnings for the games that are played from 1st April 2023 onwards.
PAN details is mandatory for placing a redeem/withdraw starting from 1st April 2023. Please complete the PAN verification process before placing a request to withdraw.
TDS deduction from a redeem depends purely on net winnings. If you have positive net winnings that are not taxed yet, TDS will be applicable on that redeem.
TDS deduction purely depends on net winnings. If you have positive net winnings, TDS will be applicable. Please check your account summary for the details of net winnings at both the redeems.