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New Tax Rules

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Tax Deducted Source (TDS)

Starting 1st April 2024, all your TDS calculations will be reset. That means, if there is some balance remaining in your Rummy Ambarella a/c on 31st March 2024, tax will be deducted on that amount (considering it as withdrawal), and the remaining amount will be carried forward to 1st April, 2024 i.e. the New Financial Year.

Let's understand this better with an example -

Mr. Rao plays games & wins cash prizes on 31st March 2024 and does not make a withdrawal until 11:59 PM. Below are some more details -

Opening A/c Balance as on 1st April 2023 Total Deposits
(Throughout the year)		 Total Withdrawals
(Throughout the year)		 Closing A/c Balance as on 31st March 2024
₹ 1500 ₹ 2000 ₹ 3000 ₹ 1000*

* Closing Balance = Deposit Balance + Winning Balance as on 31st March, 11:59 PM

To understand the tax deducted, we will have to determine the Net Winnings
= (Total Withdrawal) + (Closing A/c Balance) - (Total Deposit) - (Opening A/c Balance )
= ₹ 3000 + ₹ 1000 - ₹ 2000 - ₹ 1500
= ₹ 500

30% Tax on above Net Winnings = ₹ 150
Let’s say, out of ₹ 150, ₹ 100 tax already deducted earlier
And so, the remaining Tax to be deducted is ₹ 50

The remaining Tax would be deducted from the Closing A/c Balance & carried forward to the new Financial Year:
₹ 1000 - ₹ 50 = ₹ 950

That is how tax is deducted on 31st March i.e. end of Financial Year.

More About Tax

The Government of India passed a tax rule of applying 30% tax on Net Winnings* at the time of withdrawal or end of the Financial Year.

What is Net Winnings?

Total Withdrawals - Total Deposits = *Net Winnings

Understand Tax Calculations With Examples
Example 1 - Positive Net Winnings, Tax Deducted

On 1st April 2024, let's say Mr. Rao deposited ₹ 2000 on Rummy Ambarella & played cash games. Now after winning cash prizes, he wants to make a withdrawal of ₹ 3000. How will tax be calculated?

Transaction Total Deposits Total Withdrawals Total Net Winnings Tax Deducted
1 ₹ 2000 ₹ 3000 ₹ 1000 ₹ 300

Note: 30% tax will be deducted on Net Winnings*


Total Withdrawal - Total Deposit = Net Winnings
₹ 3000 - ₹ 2000 = ₹ 1000

30% tax will be deducted on ₹ 1000
Tax = ₹ 300

If Mr. Rao withdraws the total ₹ 3000, his withdrawal amount post tax deduction will be
₹ 3000 - ₹ 300 = ₹ 2700

If Mr. Rao withdraws ₹ 2000, his withdrawal amount post tax deduction will be
₹ 2000 - ₹ 0 = ₹ 2000
Since Net Winning was 0
(Withdrawal Amount ₹ 2000 - Deposit Amount ₹ 2000 = ₹ 0.
And so, tax will not be deducted)

Example 2 - Negative Net Winnings, No Tax Deducted

On 1st April 2024, Mr. Rao made an additional deposit of ₹ 4000 & continued to play on Rummy Ambarella. Now after winning cash prizes, he wants to withdraw ₹ 2000. How will tax be calculated?

Transaction Total Deposits Total Withdrawals Total Net Winnings Tax Deducted
1 ₹ 2000 ₹ 3000 ₹ 1000 ₹ 300
2 ₹ 4000 ₹ 2000 - ₹ 1000 ₹ 0

Note: 30% tax will be deducted on Total Net Winnings*


Total Net Winnings?

When a player makes a withdrawal request, all deposits & withdrawals made by the player
until that time is considered to calculate Total Net Winnings.
Total Withdrawals - Total Deposits = *Total Net Winnings

Total Withdrawals = ₹ 3000 + ₹ 2000 = ₹ 5000
Total Deposits = ₹ 2000 + ₹ 4000 = ₹ 6000

Total Net Winnings would be ₹ 5000 - ₹ 6000 = - ₹ 1000
As Net Winning is negative, there will be no tax deduction.

Here, Mr. Rao wants to withdraw ₹ 2000, post tax deduction
he will receive ₹ 2000 - ₹ 0 = ₹ 2000 🎉

Example 3 - Positive Net Winnings But No Tax Deducted

Mr. Rao deposits ₹ 2000 again & plays on Rummy Ambarella. This time, he wants to
make a withdrawal of ₹ 4000. How will tax be calculated?

Transaction Total Deposits Total Withdrawals Total Net Winnings Tax Deducted
1 ₹ 2000 ₹ 3000 ₹ 1000 ₹ 300
2 ₹ 4000 ₹ 2000 - ₹ 1000 ₹ 0
3 ₹ 2000 ₹ 4000 ₹ 1000 ₹ 300   ₹0

Note: 30% tax will be deducted on Total Net Winnings*


Total Net Winnings?

When a player makes a withdrawal request, all deposits & withdrawals made by the player
until that time is considered to calculate Total Net Winnings.
Total Withdrawal - Total Deposit = *Total Net Winnings

Total Withdrawal = ₹ 3000 + ₹ 2000 + ₹ 4000 = ₹ 9000
Total Deposit = ₹ 2000 + ₹ 4000 + ₹ 2000 = ₹ 8000

Total Net Winnings would be ₹ 9000 - ₹ 8000 = ₹ 1000

Now even though the Total Net Winning is ₹ 1000 i.e. positive, tax will not be deducted.

Wondering how is that possible?
It's because Total Net Winning is being considered for tax calculation.
As ₹ 300 tax was already deducted earlier, ₹ 300 will not be deducted again.

And so, on a withdrawal request of ₹ 4000, Mr. Rao will get ₹ 4000

Tax Calculation on the Withdrawal Page

You can check your Tax Calculation on the Withdrawal page.

Note:

  • If tax is deducted on positive Net Winnings on withdrawals, tax will not be deducted again on the same Net Winnings on 31st March 2025.
  • If Net Winnings are negative at the end of the Financial Year i.e. 31st March 2025, players may be eligible for a tax refund and can claim the same while filing Tax Return
FAQs

  • What exactly are the Tax Rules?

    • As per the Finance Act 2023, all Real Money Gaming Apps are mandated to deduct tax at the rate of 30% on user's Net Winnings at the time of withdrawal or on 31st March (i.e. end of Financial Year).

  • What is 'Net Winnings'?

    • Net Winnings is the difference between the total amount withdrawn and the total amount deposited in a financial year. Example -

      Total Deposit Total Withdrawal
      ₹ 2000 ₹ 3000

      Here, Net Winnings = Total Withdrawal - Total Deposit
      = ₹ 3000 - ₹ 2000
      Net Winnings = ₹ 1000

  • How is tax calculated on 'Net Winnings'?

    • Tax is calculated at the rate of 30% of Total Net Winnings at the time of Withdrawal. Let's take the above example for reference.
      Here, the Net Winnings is ₹ 1000. Tax = 30% of ₹ 1000 = ₹ 300

  • When will tax be deducted?

    • Tax will be deducted on Net Winnings at the time of withdrawal or on 31st March (i.e. at the end of the Financial Year). If tax is deducted on positive Net Winnings on withdrawals, tax will not be deducted again on the same Net Winnings on 31st March.

  • Will tax be deducted if I withdraw an amount lesser than my total deposits?

    • If your total withdrawal is less than your deposit, no tax will be deducted. Example -

      Total Deposit Total Withdrawal
      ₹ 4000 ₹ 2000

      Here, Net Winnings = Total Withdrawal - Total Deposit
      = ₹ 2000 - ₹ 4000
      Net Winnings = - ₹ 2000
      As Net Winning is negative, there will be no tax deduction.

  • Will my Opening A/c Balance be considered if I want to make a withdrawal at the start of the new Financial Year (April 2024)?

    • Let's consider the following table as an example -

      Opening A/c Balance
      as on 1st April 2024      		 Total Deposit Total Withdrawal
      ₹ 1500 ₹ 2000 ₹ 3000

      Tax is deducted on Net Winnings.

      At the start of the Financial Year (1st April 2024), if there's an Opening Balance, Net Winnings is calculated as
      = (Total Withdrawals) - (Total Deposits) - (Opening Balance)
      = ₹ 3000 - ₹ 2000 - ₹ 1500
      = - ₹ 500

      As the Net Winning here is negative, there will be no tax deduction. And so, your withdrawal amount post tax deduction would be ₹ 3000 - ₹ 0 = ₹ 3000

  • What will happen if there is some amount remaining in my Rummy Ambarella A/c at the end of the Financial Year?

    • If there is some balance remaining in your Rummy Ambarella a/c on 31st March 2024, tax will be deducted on that amount (considering it as withdrawal), and the remaining amount will be carried forward to 1st April, 2024 i.e. the New Financial Year.

      Let's understand this better with an example -

      Mr. Rao plays games & wins cash prizes on 31st March 2024 and does not make a withdrawal until 11:59 PM. Below are some more details -

      Opening A/c Balance as on 1st April 2023 Total Deposits
      (Throughout the year)      		 Total Withdrawals
      (Throughout the year)      		 Closing A/c Balance as on 31st March 2024
      ₹ 1500 ₹ 2000 ₹ 3000 ₹ 1000*

      * Closing Balance = Deposit Balance + Winning Balance as on 31st March, 11:59 PM

      To understand the tax deducted, we will have to determine the Net Winnings
      = (Total Withdrawal) + (Closing A/c Balance) - (Total Deposit) - (Opening A/c Balance )
      = ₹ 3000 + ₹ 1000 - ₹ 2000 - ₹ 1500
      = ₹ 500

      30% Tax on above Net Winnings = ₹ 150
      Let’s say, out of ₹ 150, ₹ 100 tax already deducted earlier
      And so, the remaining Tax to be deducted is ₹ 50

      The remaining Tax would be deducted from the Closing A/c Balance & carried forward to the new Financial Year:
      ₹ 1000 - ₹ 50 = ₹ 950

  • If my 'Net Winnings' go down during the year, can I get a refund of tax already deducted?

    • Tax on Net Winnings at the time of the withdrawal that are deducted are paid to the income tax department for the credit of the player. Players can file their returns with the income tax department and claim refunds subject to the Player's overall tax liability. Games24x7 will be issuing the tax deduction certificates showing the tax deducted for the player. However, Games24x7 will not be able to refund the excess tax from our end directly to any Player.

  • How can I get my Tax Certificate to file IT Returns?

    • Tax Certificates will be issued within 1 month from the last date of filing TDS returns for every quarter.

  • I play on both Rummy Ambarella. How will this impact me?

    • Players playing any games offered by Games24x7 have a common wallet across games. For taxation, deposits and withdrawals of both the platforms would be added to determine Net Winnings.

Manage Tax Smartly

Let's start with some things to remember:
30% Tax applies to your Total Net Winnings
But what exactly is Total Net Winnings?

It's simple

Total Net Winnings = Total Withdrawal - Total Deposit


Here’s how Mr. Rao enjoys 0 Tax deductions:
Increases Deposit Balance
Reduces the Withdrawal Amount
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