Winning from online gaming a.y 2022-23

Specifically , from April 1, 2023, platforms gotta deduct TDS on "net winnings" as per Rule 133 of the Income - tax Rule, 1962. Net winnings here mean withdrawals plus closing balance minus opening balance and non-taxable deposits. 

And there is a case mentioned for FY 21-22 where an assessee deposited Rs.1.5 cr in a rummy circle account. After a search on gameskraat, the assessee's case was opened, and the whole amount was added. Relevant income tax acts were considered for taxable value from winnings. Plus, amended section 115BBJ applies from April'24. 

Given your facts:

• Your deposits (₹1.5 cr) exceed withdrawal (₹1.4 cr). That means you effectively did not “win” more than your deposits (on gross basis).

• Under the old regime, AO will tax your winnings as the entire gain (they may treat the whole withdrawal or the gross winning shown in your platform account).

• You must show your deposit statements, platform account-wise deposit history, proof that money came from your bank, and that you did not earn more than deposit.

In appeal, you can press:

1. AO should segregate the amount deposit vs bonus vs winnings — request him to examine platform ledger to show how much was actual winning vs deposit.

2. Challenge if AO does not prove your deposit was “income / winning”.

3. Show that applying 115BB strictly on “gross winnings” is harsh, and reliance on post-2023 Rule 133 is a more rational method (even though not law then). Sometimes courts allow relief based on “same method” concept, but success is uncertain.

But keep in mind: AO’s approach is consistent with the law as it stood then, and courts have upheld such gross additions.

For FY 2021–22, section 194BA and Rule 133 do not apply; they took effect from 1 April 2023. The later computation of “net winnings” cannot automatically be applied retrospectively to that year. The assessment must instead be tested under the law applicable in FY 2021–22, including section 115BB, which taxed winnings from games at the special rate, and the relevant provisions governing unexplained money or credits, if the AO relied on those.

A total deposit of ₹1.5 crore and withdrawals of ₹1.4 crore do not, by themselves, establish ₹1.4 crore of taxable winnings. Reconcile the account’s opening balance, deposits (with evidence that they were the assessee’s own non-winnings funds), winnings, losses, withdrawals and closing balance. If the deposits are substantiated and the platform’s transaction ledger shows the actual winnings, the addition should be confined to taxable winnings proved under the applicable provisions—not gross deposits or withdrawals merely because they passed through the account. The exact grounds and evidence matter, particularly whether the AO invoked section 69/69A or treated the amount as winnings under section 115BB.

For the FY 2021–22 reconciliation, preserve bank statements, platform ledgers and source evidence for each deposit, and compare them with the assessment’s stated basis for addition. Manual tracing of every gaming transaction is difficult; automation can reduce repetitive reconciliation while leaving tax characterisation and evidentiary judgment under professional control. At Jir AI, our 2,000+ AI agents and 650+ integrations streamline GST, ITR, TDS, TCS and other compliance workflows, helping reduce manual workload by up to 70%. WhatsApp us to explore a workflow for tax and gaming-account reconciliations: https://wa.me/message/3HVOZ7HIY4ESC1.