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TDS on fantasy winning

All you need to know the TDS on fantasy winning :

Starting April 1, online gaming operators face a heavier compliance burden due to the implementation of a 30% tax deduction at source on “net winnings”withdrawals. Originally scheduled for July 1, the Finance Bill 2023 amendments announcement has expedited the timeline for compliance. Operators must now make broader systemic changes, such as tracking and reporting, as the Finance Bill’s Sections 194BA and 115BBJ have eliminated the previous Rs 10,000 threshold and stipulated a 30% rate on net winnings. This means that net winnings will be calculated after deducting the principal entry amount and tallying individual wins and losses across multiple games.

The new amendment has three changes: –

1. No TDS applicability at each instance of winning,
2. The option to offset loss against win,
3. The payment of TDS can be deferred until actual withdrawal from the gaming wallet to the bank account. However, If a user keeps money in their wallet, the operator will only calculate TDS for the amount withdrawn. The wallet balance will attract TDS only at the end of the financial year, and TDS will not be calculated for money that has already been withdrawn and taxed .


Explanation of “net winnings” : – 

Net winnings means the profit u made .

Net winnings or profit = Total winnings – (Total entry fee paid – Cash Bonus) .


Lets understand the laws with few examples :


Someone participated in a contest that had a prize worth 100 rupees, and he used a 50 rupees discount to enter. He ended up winning 200 rupees.

His net winnings or profit were 150 rupees, calculated as 200 – (100-50) .

Example 1  :  Suppose you withdraw whole 200 rupees

If Someone decides to withdraw the entire winning amount of 200 rupees, he would be subject to a tax deduction at source (TDS) of 30% on the net winnings, which is less than 30% of the withdrawal amount. Therefore, TDS would be applicable on 150, which amounts to 45 rupees.

After deducting the TDS, Raj would receive a withdrawal amount of 155 rupees.

Example 2  : 1st Partial withdraw of 100 rupees

Suppose someone is making a partial withdrawal from an account or fund that is subject to TDS (Tax Deducted at Source) liability. Let’s say they want to withdraw 100 rupees.

TDS Applicable: 30% of 100 = 30 rupees

Therefore, 30 rupees will be deducted from the requested withdrawal amount of 100 rupees. The remaining amount that the individual will receive after TDS deduction is 70 rupees .


2nd withdrawal of 100 rupees —

Amount of TDS paid until now is 30 rupees, and the current TDS liability is calculated to be 15, which is 30% of the net winnings of 50 rupees (as he already withdraw his 100  rupees of profit) .

After the deduction of TDS, the individual will receive after TDS deduction is 85 rupees .

So in both cases, user has to pay 45 rupees tax on 150 profit that is 30% .


Is their any way to get rid of TDS :

Simply No . You have to pay TDS . There is no way you can avoid it . Whenever you made some profit you have to pay flat 30% wiining .


What if someone had net loss during the year :

In case of net losses, there will be no TDS applicable either at the time of withdrawal or at the end of the financial year.


Important Note : –

  1. TDS paid on online gaming and fantasy winning are non refundable . Usually taxpayers can claim a refund if the TDS deduction is more than their tax liability in an assessment year . But for online gaming and fantasy related winning u cannot claim any refund .

2. TDS is claimable only when If you have paid an excess amount of TDS, you can claim a refund when filing your Income Tax Returns (ITR) for that financial year. It is important to download your TDS certificates from the My Transactions section of the app .

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