TDS Policy

Taxation Law

In accordance with the provisions of the Finance Act, 2023, following TDS policy is applicable for all players on PokerNXT from 01 April 2023 :

• TDS of 30% will be applicable on Net Winnings Withdrawal in a financial year.
• As per the new policy, Net Winnings will be calculated every time a user raises a withdrawal request from Cash Wallet. [Total withdrawals in a financial year - (total deposits in a financial year + opening balance on 01 April in cash wallet ) - Sum of winnings amount taxed already]
• The Net Winnings will be calculated based on overall gameplay in a Financial Year.
• As per the circular by CBDT, incentive bonuses would form part of net winnings and tax under section 194BA of the act is liable to be deducted at the time of withdrawal and at the end of the financial year.
• 30% TDS is applicable upon crediting of the affiliate commission upon the weekly crediting of the commission. The affiliate commission will be added to your Poker wallet, and the TDS will be cut on this gain upon withdrawal.
• 30% TDS is applicable on the rewards claimed from the Loyalty Chests in the app. The reward will be added to your Poker wallet and upon withdrawal, the TDS will be cut on this gain.
• 30% TDS is applicable on the rewards claimed from the Referral program. The reward will be added to your Poker wallet and upon withdrawal, the TDS will be cut on this gain.
• Tax deduction on withdrawal will now have to happen as follow :
  • a. say a player has Rs.10000 in PW and Rs. 0 in CW. To withdraw, he will move the money to CW. As per the new rule, TDS should not be deducted at this milestone and the whole sum will move to CW ie. Rs. 10000.
  • b. Now with CW=RS. 10000, PW = 0, the player clicks withdraw for Rs10000. The TDS is to be deducted at this point. Thus, 7000 Rs. will be sent to the player's bank account.

Note

Withdrawal means when a player raises the request from his cash wallet and the amount is transferred to his registered KYC-cleared bank account.

What Does It Mean For Players?

Find below a few scenarios to understand the application of the aforementioned TDS Policy.

Scenario 1: If your net winnings (including the withdrawal amount) are more than 0, then 30% TDS will be deducted on the net winnings at the time of withdrawal.

Example:

Using the above scenario, if you want to withdraw ₹7000, then total withdrawals in a financial year (A) will be ₹5000 + ₹7000 = ₹12000, and the net winnings will be calculated as follows:

Zero TDS Withdrawal amount: In the same scenario, if you withdraw up to ₹5,000 , then there will be zero TDS deducted as net winnings will be ₹0 [10000 - (10000 + 0) - 0]. See the calculation below:

Using the above scenario, if you want to withdraw ₹5000, then total withdrawals in a financial year (A) will be ₹5000 + ₹5000 = ₹10000, and the net winnings will be calculated as follows:

Scenario 2: If you have paid TDS in previous withdrawals, then no TDS is applicable on withdrawals till your net winnings cross the amount for which you have already paid TDS.
(TDS of ₹1800 paid on winnings of ₹6,000 as initially you had positive net winnings of ₹6,000)

In the above scenario, No TDS is applicable till your net winnings cross ₹6,000 (winnings already taxed). If you want to withdraw ₹6000, then total withdrawals in a financial year (A) will be ₹14000 + ₹6000 = ₹20000, and the net winnings will be calculated as follows:

• Zero TDS Withdrawal amount: If you withdraw up to ₹6,000, no TDS is applicable.
• If you withdraw ₹10, 000, then 30% TDS is applicable only on ₹4,000 winnings i.e. ₹1,200.

Scenario 3:You have paid TDS on initial winnings during the financial year but your net winnings have reduced post that.

Example:

TDS of ₹6000 was paid on winnings of ₹20,000 as initially, you had positive net winnings of ₹20,000. Post this, if your net winnings reduce to ₹10,000, then, subject to applicable law, the excess TDS deducted can be claimed as a refund in your annual income tax filing.

Scenario 4: At the end of the financial year, if you have an amount in your account, then TDS will be calculated on that amount by considering it as a withdrawal of the financial year and the remaining amount will be carried forward to the next year as starting deposit amount. Withdrawal from the starting deposit amount will not be subject to TDS in the next year.

Example:

In the above scenario, since the account balance at the end of March 31, 2024, would be considered a withdrawal, then total withdrawals in a financial year (A) will be ₹40000 + ₹30000 = ₹70000 and the net winnings will be calculated as follows:

Thus, ₹9,000 TDS is deducted from your account balance at the end of Mar 31, 2024, and the remaining balance of ₹21,000 will be carried forward to the next financial year as a deposit amount. You will not have to pay TDS in the next financial year on withdrawal of this amount.

Important Rules Regarding TDS Calculation on Winnings:

1. For FY2022-23 ending on 31st March 2023, PokerNXT will calculate TDS on the basis of Section 194B of the Income Tax Act. You will get a TDS certificate from us which you can use at the time of filing your annual IT return. Your completed KYC is required to apply for a TDS certificate.
2. As per the directives from the government under section 206AB of the Income Tax Act, additional TDS will be deducted on applicable transactions in case the player falls under the category of specified persons.