Net Winnings is the difference between the total amount withdrawn and the total amount deposited in a financial year.

Example -

Total Deposit  = ₹ 2000

Total Withdrawal = ₹ 3000

Here, Net Winnings = Total Withdrawal - Total Deposit

= ₹ 3000 - ₹ 2000

Net Winnings = ₹ 1000

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

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.

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

Total Deposit = ₹ 4000

Total Withdrawal =  ₹ 2000

Here, Net Winnings = Total Withdrawal - Total Deposit
= ₹ 2000 - ₹ 4000

Net Winnings = - ₹ 2000

As Net Winning is negative, there will be no tax deduction.

Let's consider the following table as an example -
Opening A/c Balance as on 1st April 2024 = ₹ 1500
Total Deposit = ₹ 2000
Total Withdrawal = ₹ 3000
Tax is deducted on Net Winnings.
At the start of the Financial Year (1st April 2024), 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 there is some balance remaining in your RummyCircle a/c on 31st March 2024, the tax will be deducted on that amount (considering it a withdrawal), and the remaining amount will be carried forward to 1st April 2024 i.e. the New Financial Year.

Example - Mr. Rao plays games & wins cash prizes on 31st March 2024 and does not make a withdrawal until 11:59 PM. Below are some more details - 

* Closing Balance = Deposit Balance + Winning Balance as on 31st March, 11:59 PM

To understand the tax deducted, we will have to determine the Net Winnings 

= (Total Withdrawal) + (Closing A/c Balance) - (Total Deposit) - (Opening A/c Balance )

= ₹ 3000 + ₹ 1000 - ₹ 2000 - ₹ 1500

= ₹ 500

30% Tax on above Net Winnings = ₹ 150

Let’s say, out of ₹ 150, ₹ 100 tax already deducted earlier 

And so, the remaining Tax to be deducted is ₹ 50

The remaining Tax would be deducted from the Closing A/c Balance & carried forward to the new Financial Year: ₹ 1000 - ₹ 50 = ₹ 950

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

If there is a tax liability at the time of withdrawal, the tax will be deducted on net winnings. Other than this, if there is a pending tax liability at the end of the financial year, the balance amount will be deducted from the player’s wallet.

TDS stands for 'Tax Deducted at Source' which we are legally obliged to deduct tax at source (“TDS”) at the time of withdrawal or the end of the Financial Year.

As per the Finance Bill passed by the Govt. of India, new tax laws are applicable on Online Gaming apps from April 1st, 2023. As per the law, Platforms offering Online Games are required to deduct tax at source (“TDS”) at the time of withdrawal or the end of the Financial Year. TDS shall be levied at the rate of 30% for all the net winnings of a Player. Here, net winnings shall mean the difference between all winnings and the entry fee paid by a Player for a year.

Deducted TDS is submitted to Income Tax Department against your PAN Card number. Hence, it is mandatory that you provide us with your correct PAN card details so that you can claim the TDS benefit while filing your tax returns. Players can file returns with the income tax department and claim refunds subject to the Player’s overall tax liability. Games24x7 will be issuing all required certificates for doing so. However, we will not be able to refund the excess TDS from our end directly to any Player.

Players playing all 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%.