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TDS Policy for Online Rummy Games
In line with the provisions contained in Finance Act, 2023, following TDS policy is applicable for all players on RummyCulture from 1 Apr, 2023.
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- TDS is applicable at the time of withdrawal and also at the year end
- 30% TDS is applicable on net winnings at the time of withdrawal and also at the year end
Net winnings = Total withdrawals - Total deposits*
(in a financial year i.e. 1 Apr to 31 Mar)
* Total deposits = deposits in the financial year + opening balance of the financial year
Any net winnings which have suffered TDS at the time of any earlier withdrawal would also be reduced while computing Net winnings at the time of withdrawal.
Please note:
The TDS Policy is based on the understanding of the provisions as introduced/ amended by Finance Act, 2023 and the Company reserves its right to modify/ change/ amend the TDS Policy basis law applicable at the relevant time.
Find below a few scenarios to understand application of the aforementioned TDS Policy.
Scenario 1:
- You have a balance of ₹10,000 in your account on 25 Mar 2023. You decide to withdraw it on 5 Apr 2023.
- On 1 Apr, 2023, ₹10,000 will be considered as your year opening balance which will be considered as a deposit in TDS calculation.
- No TDS will be applicable as your net winnings are ₹0.
Example:
| Total withdrawals (A) | ₹10,000 |
| Total deposits (B)(same as opening balance) | ₹10,000 |
| Net winnings (A-B) | ₹0 |
| TDS applied | ₹0 |
Scenario 2:
If your net winnings are less than or equal to ₹0, then TDS is not applicable.
Let us consider, you have a year opening balance of ₹3,000 as on 1 Apr, 2023 and have deposited ₹7,000 on 2 Apr, 2023.
Total deposits (B)
| Opening balance(As of 1 Apr, 2023) | ₹3,000 |
| Deposit(Deposited on 2 Apr, 2023) | ₹7,000 |
| Total deposits (B) | ₹10,000 |
Now, if you are withdrawing ₹5,000 on 3 Apr, 2023, here's how the TDS calculation will work.
| Total withdrawals (A) | ₹5,000 |
| Total deposits (B) | ₹10,000 |
| Net winnings (A- B) | -₹5,000 |
| TDS applied(As net winnings is negative) | ₹0 |
In this case, no TDS will be applied as the net winnings are negative.
Scenario 3:
If your net winnings (including the withdrawal amount) are more than 0, then 30% TDS will apply on the net winnings at the time of withdrawal.
Assume that in a financial year, you’ve deposited a total of ₹7,000 and have also had an opening balance of ₹3,000 at the start of this financial year. So now, your total deposit stands at ₹10,000 (₹3,000 + ₹7,000).
Total deposits (B)
| Opening balance | ₹3,000 |
| Deposit | ₹7,000 |
| Total deposits (B) | ₹10,000 |
In the same financial year, you have completed a withdrawal of ₹5,000. And on 30 Apr, 2023, you wanted to withdraw an additional ₹7,000. So, with this withdrawal, your total withdrawal stands at ₹12,000 (₹5,000 + ₹7,000).
Total withdrawals (A)
| Withdrawal on 23 Apr, 2023 | ₹5,000 |
| Withdrawal on 30 Apr, 2023 | ₹7,000 |
| Total withdrawals (A) | ₹12,000 |
In this case, on your withdrawal request of ₹7,000, TDS will be applied on the net winnings (A-B) of ₹2,000 (₹12,000 - ₹10,000) at the rate of 30%. However, no TDS will be applied to the remaining balance of ₹5,000. After deducting ₹600 TDS, ₹6,400 will be credited to bank account.
| Withdrawal amount | ₹7,000 |
| Amount eligible without tax | ₹5,000 |
| Taxable amount(Net winnings : A-B ) | ₹2,000 |
| TDS on taxable amount @30% | -₹600 |
| Amount to be credited to your bank account | ₹6,400 |
Scenario 4:
If TDS has been applied to your previous withdrawals, then no TDS is applicable on withdrawals till your net winnings exceed the amount for which you have already paid TDS.
Let us consider that as of 30 Apr, 2023, the following TDS calculations were applied:
Total withdrawals in the financial year = ₹20,000 Total deposits in the financial year = ₹14,000 So, your net winnings are = ₹6,000. On this ₹6000, your TDS @30% was applied = ₹1,800
Now, as of 15 May, 2023, let us assume your deposits increase to ₹20,000 (₹14,000 as of 30 Apr, 2023 + ₹6,000 additional deposit between 30 Apr to 15 May).
Total withdrawals = ₹20,000.
Total deposits = ₹20,000 (₹14,000 as of 30 Apr + ₹6,000 additional deposit between 30 Apr to 15 May)
Net winnings previously taxed = ₹6,000 (₹1,800 TDS deducted on net winnings of ₹6,000 @ 30%)
Here, there could be two possibilities.
No TDS is applicable till your net winnings cross ₹6,000 as your winnings have already been taxed.
Possibility 1:
If you withdraw up to ₹6,000, no TDS is applicable (as TDS is already paid)
| Withdrawal amount | ₹6,000 |
| Amount eligible without tax | ₹6,000 |
| Taxable amount(Net winnings : A-B ) | ₹0 |
| TDS on taxable amount @30% | ₹0 |
| Amount to be credited to your bank account | ₹6,000 |
Possibility 2:
If you withdraw ₹10,000, then TDS is applicable only on ₹4,000 net winnings @30% because you have already paid tax on ₹6,000. So, on withdrawal request of ₹10,000, TDS of ₹1,200 will be deducted and remaining amount of ₹8,800 will be credited to your bank account.
| Withdrawal amount | ₹10,000 |
| Amount eligible without tax | ₹6,000 |
| Taxable amount | ₹4,000 |
| TDS on taxable amount @30% | -₹1,200 |
| Amount to be credited to your bank account | ₹8,800 |
Scenario 5:
Let us assume you have paid TDS on the initial winnings during the financial year, but your net winnings have reduced subsequently.
In this case on 30 Apr, 2023, following will be the TDS calculation in your account:
| Total withdrawals (A) | ₹20,000 |
| Total deposits (B) | ₹14,000 |
| Net winnings (A- B) | ₹6,000 |
| TDS applied till date | ₹1,800 |
After this, on 15 May, 2023 your deposit reaches ₹20,000 (₹14,000 balance till 30 Apr + ₹6,000 additional amount deposited from 30 Apr to 15 May)
Total withdrawals in the financial year = ₹20,000 Net winnings in the financial year = ₹20,000- ₹20,000 = ₹0
TDS calculation as on 15 May, 2023
| Total withdrawals (A) | ₹20,000 |
| Total deposits (B) | ₹20,000 |
| Net winnings (A- B) | ₹0 |
In such a case, subject to applicable law, the excess TDS applied can be claimed as a refund during your annual income tax filing.
We are often asked what happens to the balance lying in an account at end of the financial year.
Scenario 6:
At the end of the financial year, if you have some amount lying in your wallet (excluding the amount on the table), then TDS will be applied to that amount by considering it as a withdrawal for the financial year. The remaining amount will be carried forward to the next year as an opening balance. A withdrawal from the opening balance will not be subjected to TDS in the next year.
For example, let us assume:
Total deposits in the financial year = ₹40,000
Total withdrawals in the financial year = ₹40,000
TDS applied to date (on the winning amount of ₹5,000 as you had net winnings of ₹5,000 previously) = ₹1,500
Account balance at the end of 31 Mar, 2024 = ₹30,000
In this situation, following calculation will be done in your account:
| Total withdrawals (A)Withdrawals of ₹40,000 + ₹30,000 a/c balance | ₹70,000 |
| Total deposits (B) | ₹40,000 |
| Net winnings (A-B) | ₹30,000 |
| Net winnings previously taxed | ₹5,000 |
| Taxable net winnings(₹30,000- ₹5,000) | ₹25,000 |
| TDS on taxable amount @30%30% on ₹25,000 | ₹7,500 |
Thus, TDS of ₹7,500 is applied to your account balance at the end of 31 Mar, 2024 and the remaining balance of ₹22,500 (₹30,000- ₹7,500) will be carried forward to the next financial year as a opening balance. TDS will not be applied in the next financial year on withdrawals of ₹22,500.
Special Note:
- In case, you have an amount on the table at the end of the financial year, then it will not be considered in next year's opening balance.
