TDS Policies
Dear Users,
Spot Games is adopting a new TDS policy which is legally mandated post the introduction of
the Finance Act, 2023 (“Finance Act”),
as introduced by the Central Government before the Lok Sabha, as read with the Income Tax Act, 1961 (“Income Tax Act”).
This policy will come into effect in the month of April 2023.
What is TDS?
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TDS means Tax Deductible at Source introduced by the Government to collect tax at the very source of the income.
The deductor, in this case Spot Games, is legally mandated to pay TDS to the Central Government.
What are the new changes?
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As per Section 194BA of the Income Tax Act read with Section 115BBJ, online gaming companies are required to deduct a TDS of 30% on the
“Net Winnings” of users at the time of the withdrawal and the remaining untaxed amount at the end of the year.
What is Net Winnings?
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Net Winnings = Total Withdrawal during a year - total deposit in year - remaining balance at the end of the previous year - net winnings on
which TDS has already been deducted.
What are 2022-23 and 2023-24?
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2022-23 refers to the Financial Year 2022-23 which began on April 1, 2022 and ended on March 31, 2023.
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2023-24 refers to the Financial Year 2023-24 which begins on Apr 1, 2023 and ends of March 31, 2024.
Scenarios
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Scenario #1
| Total Withdrawal in 2023-2024 A |
Remaining Balance from 2022-23 B |
Total Deposit in 2023-2024 C |
Net Winnings (A-B-C) |
TDS |
| 20,0000 |
40,000 |
5,000 |
25,000 |
0 |
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In the above example let’s say your balance was Rs. 40,000 in the previous financial year.
Let’s say you withdraw Rs. 20,000 in the month of April 2023 and have deposited Rs. 5,000 by way of top ups. In such a scenario,
since your withdrawal is lesser than your previous year’s balance and your top up amount, you will be charged 0 TDS
(as indicated on the table above)
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Let’s say in May 2023, you do not do any top up and withdraw Rs. 15,000. In such a scenario as well your TDS charged will be 0. Why?
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Total Withdrawal in 2023-2024 is now Rs. 35,000 (Rs. 20,000 in April 2023 and Rs. 15,000 in May 2023) (A)
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Total total deposit in 2023-2024 is Rs. 5,000 (Done in April 2023) (B) and
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Your remaining balance from 2022-2023 is Rs. 40000 (C)
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A-B-C is (Rs. 10,000)
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TDS = 0
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Let’s say now in June 2023, you withdraw an amount of Rs. 15,000 and do not deposit any money in the form of top up.
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Total Withdrawal in 2023-2024 is now Rs. 50,000 (Rs. 20,000 in April 2023, Rs. 15,000 in May 2023 and Rs. 15,000 in June 2023)
(A)
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Total total deposit in 2023-2024 is Rs. 5,000 (Done in April 2023) (B) and
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Your remaining balance from 2022-2023 is Rs. 40000 (C)
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A-B-C is Rs. 5,000
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TDS= Rs. 1,500 (30% of Rs. 5000)
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Let’s say now in July 2023, you withdraw Rs.10,000 and deposit Rs. 10,000.
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Total Withdrawal in 2023-2024 is now Rs. 60,000 (Rs. 20,000 in April 2023,
Rs. 15,000 in May 2023, Rs. 15,000 in June 2023 and Rs. 10,000 in July 2023) (A)
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Total total deposit in 2023-2024 is Rs. 15,000 (Rs. 5,000 in April 2023 and Rs. 10,000 in July 2023) (B) and
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Your remaining balance from 2022-2023 is Rs. 40000 (C)
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A-B-C is Rs. 5,000
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TDS = 0 (Why? Because your TDS on your net winnings of Rs. 5,000 was already deducted last month)
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Let’s say now in August 2023, you withdraw Rs. 10,000 and do not make any deposit.
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Total Withdrawal in 2023-2024 is now Rs. 70,000 (Rs. 20,000 in April 2023, Rs. 15,000 in May 2023, Rs. 15,000 in June 2023, Rs. 10,000 in July 2023 and Rs. 10,000 in August 2023) (A)
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Total total deposit in 2023-2024 is Rs. 15,000 (Rs. 5,000 in April 2023 and Rs. 10,000 in July 2023) (B) and
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Your remaining balance from 2022-2023 is Rs. 40000 (C)
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A-B-C is Rs. 15,000
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TDS = 3000 (Why? TDS of 30% will be charged only on Rs. 10,000, since TDS has already been charged on Rs. 5,000 already)
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Scenario #2
| Total Withdrawal in 2023-2024 A |
Remaining Balance from 2022-23 B |
Total Deposit in 2023-2024 C |
Net Winnings (A-B-C) |
TDS |
| 20,0000 |
0 |
5,000 |
15,000 |
4500 |
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In the above scenario, you do not have any remaining balance from 2022-23. You withdraw an amount of Rs. 20,000 in April 2023, make a deposit of Rs. 5,000 by way of top ups. You will be charged a TDS of Rs. 4,500 (As indicated in the above)
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Let’s say now in May 2023, you withdraw an amount of Rs. 15,000 and also deposited an amount of Rs. 10,000. In such a situation:
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Total Withdrawal in 2023-2024 is Rs. 30,000 (A) (Rs. 15,000 in April 2023 and Rs. 15,000 in May 2023)
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Total Deposit in 2023-2024 is Rs. 15,000 (B) (Rs. 10,000 in May 2023)
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Remaining Balance from 2022-23 is 0 (C)
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A-B-C is 15,000
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TDS = 0 (Since TDS for Net Winnings of 15,000 was already deducted in April 2023)
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Scenario #3
| Total Withdrawal in 2023-2024 A |
Remaining Balance from 2022-23 B |
Total Deposit in 2023-2024 C |
Net Winnings (A-B-C) |
TDS |
| 40,0000 |
0 |
20,000 |
20,000 |
10,000 |
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If your net winnings reduce, then, subject to applicable law, the excess TDS deducted can be claimed as refund in your annual income tax filing.
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Please note at the time of your tax return, you can claim for a refund of money deducted as TDS, subject to your overall income and subject to applicable law.
(Spot Games does not provide tax advice. For tax advice, please reach out to a tax consultant)
