Tax Ledger Reset
As per Section 194BA of the Income Tax Act, 1961 the TDS needs to be deducted on Net Winnings lying in the closing balance as on 31st March of the financial year.
Towards the end of each Financial Year, your ledger gets reset for next year's Financial Year for taxation purposes.
This year with the introduction of auto TDS deduction, TDS will be applicable on net winnings withdrawn any time before 31st March'24. Your withdrawable amount will remain the same, whether you choose to withdraw or keep the balance in your CB Wallet.
The TDS @30% shall be computed on net winnings at the time of withdrawal or the winnings lying in the closing balance as on 31st March of the financial year
See how this is calculated?
Example 1:
- Total Withdrawals (in FY 23-24) (A): ?40,000
- Total Deposits (in FY 23-24) (B): ?20,000
- Opening Balance (Of FY 23-24) (C): ?10,000
- Closing Balance (at the end of 23-24) (D): ?15,000
- Net Winnings Withdrawn in FY'24 (E): ?15000
- Net Winnings (A+D) - (B+C+E): ?10000
Example 2:
- Total Withdrawals (in FY 23-24) (A): ?7,500
- Total Deposits (in FY 23-24) (B): ?5,000
- Opening Balance (Of FY 23-24) (C): ?0
- Closing Balance (at the end of 23-24) (D): ?6,000
- Net Winnings Withdrawn in FY'24 (E): ?2,500
- Net Winnings (A+D) - (B+C+E): ?6,000
Definition of terms:
- - Balance (excluding bonuses and rewards balance): The total funds available in the account not including any bonuses and rewards balance
- - Non-Taxable Withdrawal Ledger: A record of amounts that can be withdrawn without being subject to tax
- - TDS (30%) on Net Winnings: The tax deducted at the source on the net winnings from the account
Terms & conditions:
- Disclaimer 1: The above-mentioned information is a Company's View, please consult a professional or expert on the aforesaid matter before filing your Income Tax Return
- Disclaimer 2: The Winners shall be responsible for payment of any other applicable taxes, including but not limited to, income tax, gift tax, etc. in respect of the Net Winnings
- Disclaimer 3: rummybo shall not in any manner be responsible for users' individual tax matters
FAQs
As per Section 194BA of the Income Tax Act, the TDS needs to be deducted from the net winning balance at the end of the financial year i.e. 31st March'24. This adheres to the Tax provision.
Towards the end of each Financial Year, your ledger gets reset for next year's Financial Year for taxation purposes.
This year with auto TDS deduction, TDS will be applicable on net winnings withdrawn any time before 31st March'24. Your withdrawable amount will remain the same, whether you choose to withdraw or keep the balance in your rummybo Wallet. Let's understand this better with an example.
Let's say you have ?10,000 net winnings in your rummybo wallet. If you withdraw it before 31st March'24, you will receive ?7,000 in your bank account after 30% tax deduction. If you don't withdraw it then TDS will be deducted from this amount and your balance will be ?7,000 on 1st April'24, which will not incur any TDS on withdrawal.
If you don't have any net winnings as on 31st March 2024, TDS will not be deducted from your balance.
The TDS deducted on amount withdrawn during the year can be claimed as a refund by filing Income Tax Return and reporting the Net winning from online gaming as Zero. Usually, the refund is processed by the IT department in 30 days of filing of the Return.
The total net winnings from all the platforms need to be clubbed for the purpose of reporting your income in Income Tax Return and hence, the final taxable income will be net winnings/losses of all platforms put together.
The excessive TDS deducted during the previous year can be adjusted against the Tax payable on Income from other heads such as salary or any other sources or can be claimed as a refund from Income Tax Department.
There is no explicit prohibition under the Income Tax Act to set-off losses of a specific year
Your withdrawable balance which did not suffer TDS in FY 2023-24 will be carried forward to FY 2024-25 as opening balance.
Once the TDS has been debited, we will provide the TDS certificate over the next 45 - 90 days of the following quarter. Please note that this duration might change as per the notification from the Government. Kindly contact [email protected] to get your certificate.
Please contact [email protected] to get your certificate.