Quick Summary
The Central Board of Direct Taxes (CBDT) has amended income tax rules to streamline and standardize the calculation and reporting of winnings from online gaming to improve tax compliance. The Income Tax (Fifth Amendment) Rules, 2023, notified by the direct tax authority, specifies a formula for computing the net winnings from online games in a financial year which is liable to a 30% income tax. The new rule said that net taxable winning in a year would be the difference between the sum of
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FAQ :
The amended rules aim to standardise the calculation and reporting of online gaming winnings to improve tax compliance.
Net taxable winnings are calculated as the difference between the total amount withdrawn plus the closing balance, and the sum of non-taxable deposits plus the opening balance in a user account.
Online gaming winnings are subject to a 30% income tax.
Yes, online gaming platforms do not need to deduct TDS on winnings withdrawn by players if the net winnings are less than £100 a month, provided certain conditions are met and the tax liability is eventually settled.
A non-taxable deposit includes amounts like borrowed money deposited into a user account.
The new rules and guidelines also define the taxability of bonuses, referral bonuses, and incentives received by players.
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