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 :

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:

Total withdrawals in the financial year(A) ₹5,000
Total deposits in the financial year(B) ₹10,000
Opening Balance on 1 April in cash wallet (C) ₹0
Sum of winnings taxed Already (D) ₹0

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:


Net Winnings [A - (B+C) - D] = [12000 - (10000 + 0) - 0] 2000
30% TDS Applicable on Net Winnings 600
30% TDS Applicable on Net Winnings(D) ₹600
Amount to be credited to the Bank account (current withdrawal amount - TDS) 6400

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:


Total withdrawals in the financial year(A) ₹5,000
Total deposits in the financial year(B) ₹10,000
Opening Balance on 1 April in cash wallet (C) ₹0
Sum of winnings taxed Already (D) ₹0

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:


Net Winnings [A - (B+C) - D] = [10000 - (10000 + 0) - 0] 0
30% TDS Applicable on Net Winnings 0
Amount to be credited to the Bank account(current withdrawal amount - TDS) 5000

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)


Total withdrawals in a financial year (A) 14000
Total deposits in a financial year (B) 20000
Opening Balance on 1 April in cash wallet (C) 0
Sum of winnings taxed Already (D)
(TDS of ₹1800 paid on winnings of ₹6,000 as initially you had positive net winnings of ₹6,000)
6000

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:


Net Winnings [A - (B+C) - D] = [20000 - (20000 + 0) - 6000] -6000
30% TDS Applicable on Net Winnings 0
Amount to be credited to the Bank account (current withdrawal amount - TDS) 6000


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


Example:

Total withdrawals in the financial year(A) ₹40,000
Total deposits in the financial year(B) ₹20,000
Opening Balance on 1 April in cash wallet (C) 0
Sum of winnings taxed Already (D) ₹20,000
TDS paid to date ₹6,000

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:

Total withdrawals in the financial year(A) ₹40,000
Total deposits in the financial year(B) ₹35,000
Account balance at the end of Mar 31, 2024(C) ₹30,000

Sum of winnings taxed already (D)

(TDS of ₹1500 paid on winnings of ₹5,000 as initially you had positive net winnings of ₹5,000)

₹5,000

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:


Total withdrawals in the financial year (A) ₹70,000
Total deposits in the financial year(B) ₹35,000
Net winnings (A - B - D) ₹30,000
30% TDS Applicable on Net Winnings ₹9,000

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.