How to Compute Tax and TDS on Net Winnings from Online Games?
- Blog|News|Transfer Pricing|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 24 May, 2023
Latest from Taxmann
With effect from the assessment year 2024-25, a new Section 115BBJ has been introduced by the Finance Act 2023 to tax net winnings from any online games. A corresponding Section 194BA has also been inserted with effect from 01-04-2023 for the deduction of tax from the net winnings from online games. It is to be noted that only the net winnings from online games shall attract chargeability under Section 115BBJ. Further, TDS under section 194BA is also required to be deducted from the amount of net winnings.
The provisions provide that the net winnings shall be computed in the manner as may be prescribed. The manner of computation of net winning has been prescribed in Rule 133 of the Income-tax Rules 1962.
Further, the CBDT has issued removal of difficulty guidelines for the purpose of deduction of tax under Section 194BA. These guidelines are binding on the income-tax authorities and the person liable to deduct income-tax. It is to be noted that unlike Section 194BA, Section 115BBJ does not empower the CBDT to issue removal of difficulties guidelines to remove difficulties that may arise in implementing Section 115BBJ. A reference may be taken from these removal difficulties guidelines for Section 115BBJ, but they cannot be considered binding. It is settled law that tax collection provisions like TDS are not determinative of the nature of levy and taxability. What suffers TDS may not be taxable, while what is exempt from TDS may not necessarily be tax-exempt.
This article explains the computation mechanism for net winnings and discusses the guidelines issued by the CBDT.
Click Here To Read The Full Article
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
