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New Tax Rules

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Starting April 1, 2023 as per the new tax rule passed by the Govt.,
30% tax will apply on Net Winnings*.

What is Net Winnings?

Total Withdrawals - Total Deposits = *Net Winnings

When is Tax Deducted?

Tax will be deducted at the time of a withdrawal or on 31st March 2024 (i.e. at the end of the financial year).

Tax Calculation with Examples
Example 1 - Positive Net Winnings, Tax Deducted

On 1st April 2023, let's say Mr. Rao deposited ₹ 2000 on RummyCircle & played cash games. Now after winning cash prizes, he wants to make a withdrawal of ₹ 3000. How will tax be calculated?

Transaction Total Deposits Total Withdrawals Total Net Winnings Tax Deducted
1 ₹ 2000 ₹ 3000 ₹ 1000 ₹ 300

Note: 30% tax will be deducted on Net Winnings*


Total Withdrawal - Total Deposit = Net Winnings
₹ 3000 - ₹ 2000 = ₹ 1000

30% tax will be deducted on ₹ 1000
Tax = ₹ 300

If Mr. Rao withdraws the total ₹ 3000, his withdrawal amount post tax deduction will be
₹ 3000 - ₹ 300 = ₹ 2700

If Mr. Rao withdraws ₹ 2000, his withdrawal amount post tax deduction will be
₹ 2000 - ₹ 0 = ₹ 2000
Since Net Winning was 0, no tax was deducted
(Withdrawal Amount ₹ 2000 - Deposit Amount ₹ 2000 = ₹ 0)

Example 2 - Negative Net Winnings, No Tax Deducted

On 1st April 2023, Mr. Rao makes an additional deposit of ₹ 4000 & continues to play on RummyCircle. Now after winning cash prizes, he wants to withdraw ₹ 2000. How will tax be calculated?

Transaction Total Deposits Total Withdrawals Total Net Winnings Tax Deducted
1 ₹ 2000 ₹ 3000 ₹ 1000 ₹ 300
2 ₹ 4000 ₹ 2000 - ₹ 1000 ₹ 0

Note: 30% tax will be deducted on Net Winnings*


Total Net Winnings?

When a player makes a withdrawal request, all deposits & withdrawals made by the player
until that time is considered to calculate Total Net Winnings.
Total Withdrawals - Total Deposits = *Total Net Winnings

Total Withdrawals = ₹ 3000 + ₹ 2000 = ₹ 5000
Total Deposits = ₹ 2000 + ₹ 4000 = ₹ 6000

Total Net Winnings would be ₹ 5000 - ₹ 6000 = - ₹ 1000
As Net Winning is negative, there will be no tax deduction.

Here, Mr. Rao wants to withdraw ₹ 2000, post tax deduction
he will receive ₹ 2000 - ₹ 0 = ₹ 2000 🎉

Example 3 - Positive Net Winnings But No Tax Deducted

Mr. Rao deposits ₹ 2000 again & plays on RummyCircle. This time, he wants to
make a withdrawal of ₹ 4000. How will tax be calculated?

Transaction Total Deposits Total Withdrawals Total Net Winnings Tax Deducted
1 ₹ 2000 ₹ 3000 ₹ 1000 ₹ 300
2 ₹ 4000 ₹ 2000 - ₹ 1000 ₹ 0
3 ₹ 2000 ₹ 4000 ₹ 1000 ₹ 300   ₹0

Note: 30% tax will be deducted on Net Winnings*


Total Net Winnings?

When a player makes a withdrawal request, all deposits & withdrawals made by the player
until that time is considered to calculate Total Net Winnings.
Total Withdrawal - Total Deposit = *Total Net Winnings

Total Withdrawal = ₹ 3000 + ₹ 2000 + ₹ 4000 = ₹ 9000
Total Deposit = ₹ 2000 + ₹ 4000 + ₹ 2000 = ₹ 8000

Total Net Winnings would be ₹ 9000 - ₹ 8000 = ₹ 1000

Now even though the Total Net Winning is ₹ 1000 i.e. positive, tax will not be deducted.

Wondering how is that possible?
It's because Total Net Winning is being considered for tax calculation.
As ₹ 300 tax was already deducted earlier, ₹ 300 will not be deducted again.

And so, on a withdrawal request of ₹ 4000, Mr. Rao will get ₹ 4000

Tips from Mr. Rao:

For 0 tax deduction, here's what Mr. Rao would do

Reduce Withdrawal Amount

Note: 30% tax will be deducted on Net Winnings*


Total Net Winnings?

When a player makes a withdrawal request, all deposits & withdrawals made by the player
until that time is considered to calculate Total Net Winnings.
Total Withdrawal - Total Deposit = *Total Net Winnings

Total Withdrawal = ₹ 3000 + ₹ 2000 + ₹ 4000 = ₹ 9000
Total Deposit = ₹ 2000 + ₹ 4000 + ₹ 2000 = ₹ 8000

Total Net Winnings would be ₹ 9000 - ₹ 8000 = ₹ 1000

Now even though the Total Net Winning is ₹ 1000 i.e. positive, tax will not be deducted.

Wondering how is that possible?
It's because Total Net Winning is being considered for tax calculation.
As ₹ 300 tax was already deducted earlier, ₹ 300 will not be deducted again.

And so, on a withdrawal request of ₹ 4000, Mr. Rao will get ₹ 4000

Tax Amount on Withdrawal Page

You can check your Tax Calculation on the Withdrawal page.

Note:

  • If tax is deducted on positive Net Winnings on withdrawals, tax will not be deducted again on the same Net Winnings on 31st March 2024.
  • If Net Winnings are negative at the end of the Financial Year i.e. 31st March 2024, players may be eligible for a tax refund and can claim the same while filing Tax Return
FAQs
  • What exactly are the New Tax Rules?

    • As per the Finance Act 2023, all Real Money Gaming Apps are mandated to deduct tax at the rate of 30% on user's Net Winnings at the time of withdrawal or on 31st March (i.e. end of Financial Year).

  • What is 'Net Winnings'?

    • Net Winnings is the difference between the total amount withdrawn and the total amount deposited in a financial year. Example -

      Total Deposit Total Withdrawal
      ₹ 2000 ₹ 3000

      Here, Net Winnings = Total Withdrawal - Total Deposit
      = ₹ 3000 - ₹ 2000
      Net Winnings = ₹ 1000

  • How is tax calculated on 'Net Winnings'?

    • Tax is calculated at the rate of 30% of Total Net Winnings at the time of Withdrawal. Let's take the above example for reference.
      Here, the Net Winnings is ₹ 1000. Tax = 30% of ₹ 1000 = ₹ 300

  • When will tax be deducted?

    • Tax will be deducted on Net Winnings at the time of withdrawal or on 31st March (i.e. at the end of the Financial Year). If tax is deducted on positive Net Winnings on withdrawals, tax will not be deducted again on the same Net Winnings on 31st March.

  • Will tax be deducted if I withdraw an amount lesser than my total deposits?

    • If your total withdrawal is less than your deposit, no tax will be deducted. Example -

      Total Deposit Total Withdrawal
      ₹ 4000 ₹ 2000

      Here, Net Winnings = Total Withdrawal - Total Deposit
      = ₹ 2000 - ₹ 4000
      Net Winnings = - ₹ 2000
      As Net Winning is negative, there will be no tax deduction.

  • Will my Opening A/c Balance be considered if I want to make a withdrawal at the start of the new Financial Year (April 2023)?

    • Let's consider the following table as an example -

      Opening A/c Balance
      as on 1st April 2023
      Total Deposit Total Withdrawal
      ₹ 1500 ₹ 2000 ₹ 3000

      Tax is deducted on Net Winnings.

      At the start of the Financial Year (1st April 2023), if there's an Opening Balance, Net Winnings is calculated as
      = (Total Withdrawals) - (Total Deposits) - (Opening Balance)
      = ₹ 3000 - ₹ 2000 - ₹ 1500
      = - ₹ 500

      As the Net Winning here is negative, there will be no tax deduction. And so, your withdrawal amount post tax deduction would be ₹ 3000 - ₹ 0 = ₹ 3000

  • If my 'Net Winnings' go down during the year, can I get a refund of tax already deducted?

    • Tax on Net Winnings at the time of the withdrawal that are deducted are paid to the income tax department for the credit of the player. Players can file their returns with the income tax department and claim refunds subject to the Player's overall tax liability. Games24x7 will be issuing the tax deduction certificates showing the tax deducted for the player. However, Games24x7 will not be able to refund the excess tax from our end directly to any Player.

  • How can I get my Tax Certificate to file IT Returns?

    • Tax Certificates will be issued within 1 month from the last date of filing TDS returns for every quarter.

  • I play on both RummyCircle & My11Circle. How will this impact me?

    • Players playing any games offered by Games24x7 have a common wallet across games. So, for taxation, the entry fee paid for all games will be deducted from the winnings from all games. The balance amount will be considered for taxation at the rate of 30%.

  • Why did the method of calculating Tax on Net Winnings change?

    • The previous method to calculate Net Winnings was (Total Winnings) - (Total Entry Fees).

    • We have simplified the Net Winnings calculation. The revised method calculates Net Winnings as (Total Withdrawals) - (Total Deposits).

    • This method of calculating Net Winnings will apply from 1st April 2023.

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