TDS
As
per the Finance Act 2023-24, 30% TDS
will be deducted from net winnings.
What’s New?
- Pay TDS only on net winnings.
- TDS will be deducted from the withdrawal amount at the time of withdrawal or at the end of the financial year
Note: This policy is liable to change depending on any further directive the Government of India issues.
Learn about the 2023-24 FY end
TDS settlement
What does it mean for players?
Players have to pay 30% TDS only on net winnings.
Here is the formula to calculate net winnings:
Understanding Key Terms
- Withdrawals: Current Withdrawal + Previous withdrawals made in the current FY
- Deposits: Total amount deposited into the account by the player in the current FY
- FY Opening Balance: Total wallet balance (deposit + withdrawable) on 1st April, i.e. at the start of the current FY
*Financial Year (FY) = 1st April to 31st March
Scenario 1: A player places the 1st withdrawal request for ₹10,000 in the financial year.
| Amount the player wants to withdraw (A) | ₹10,000 |
| Deposit made by player (B) | ₹3,000 |
| FY Opening Balance, on 1st April 2023 (C) | ₹5,000 |
| Net Winnings ( A − B − C) | ₹2,000 |
| 30% TDS on Net Winnings | ₹600 |
| Player will get | ₹9,400 |
Scenario 2: A player places the 1st withdrawal request for ₹5,000 in the financial year.
| Amount the player wants to withdraw (A) | ₹5,000 |
| Deposit made by player (B) | ₹3,000 |
| FY Opening Balance, on 1st April 2023 (C) | ₹5,000 |
| Net Winnings ( A − B − C) | -₹3,000 |
| 30% TDS on Net Winnings | 0 |
| Player will get | ₹5,000 |
No TDS will be deducted when there are no net winnings.
Where can I see the tax summary?
Your TDS statement will be visible under the Account Summary.
Your will receive your TDS certificate after 45 days of the end of a quarter.
What happens when a player makes multiple withdrawals and deposits in a financial year?
Let us understand this with the help of a few examples of what happens when a player makes 2 or more withdrawals in a financial year.
Scenario 1: When Net winnings increase in the financial year.
FY Opening Balance: ₹5,000
The player deposits ₹3,000 on 5th April 2023.
1st withdrawal made
on 20th May 2023 is as follows:
| Withdrawal 1 (A) | ₹10,000 |
| Deposit made (B) | ₹3,000 |
| FY Opening Balance (C) | ₹5,000 |
| Net Winnings = (A − B − C) | ₹2,000 |
| 30% TDS on Net Winnings | ₹600 |
| Player Received | ₹9400 |
The player deposits ₹2,000 on 10th June 2023.
The player places a 2nd withdrawal request for ₹5,000 on 5th July 2023.
| Total Withdrawal (A) (₹10,000 + ₹5,000) | ₹15,000 |
| Total Deposit (B) (₹3,000 + ₹2,000) | ₹5,000 |
| FY Opening Balance (C) | ₹5,000 |
| Net Winnings = (A - B - C) | ₹5,000 |
| 30% TDS on Net Winnings | ₹1,500 |
| TDS Paid Already | ₹600 |
| TDS Deduction on 2nd Withdrawal | ₹900 |
| Player will get | ₹4100 |
In this case, TDS as per current Net Winnings is ₹1,500. But the player has already paid ₹600 in the
last withdrawal. Hence, only the balance TDS of ₹900 will be deducted.
That is why the player gets ₹4100 in their account after the TDS deduction.
Scenario 2: When the player’s Net Winnings decrease in the financial year.
FY Opening Balance: ₹5,000
The player deposits ₹3,000 on 5th April 2023.
1st withdrawal made
on 20th May 2023 is as follows:
| Withdrawal 1 (A) | ₹10,000 |
| Deposit made (B) | ₹3,000 |
| FY Opening Balance (C) | ₹5,000 |
| Net Winnings = (A − B − C) | ₹2,000 |
| 30% TDS on Net Winnings | ₹600 |
| Player Received | ₹9400 |
The player deposits ₹7,000 on 10th June 2023.
The player wants to make a 2nd withdrawal of ₹4,000 on 5th July 2023.
| Total Withdrawal (A) (₹10,000 + ₹4,000) | ₹14,000 |
| Total Deposit (B) (₹3,000 + ₹7,000) | ₹10,000 |
| FY Opening Balance (C) | ₹5,000 |
| Net Winnings = (A - B - C) | -₹1,000 |
| 30% TDS on Net Winnings | 0 |
| TDS Deduction on 2nd Withdrawal | ₹0 |
| Player will get | ₹4000 |
Since the Net Winnings have decreased, no TDS will be deducted from this withdrawal.
Note - This will be a case of Excess TDS Paid on Previous Withdrawal
In the above example,
TDS paid on 1st withdrawal = ₹600
TDS liability on 2nd Withdrawal (as per current net winnings) = ₹0
Excess TDS paid = ₹600
Note - There are 2 ways to claim back any excess TDS paid:
- Players can claim a refund from the Income Tax Department while filing ITR.
- Players can make a tax-free withdrawal till their TDS liability does not exceed the Excess TDS paid.
In the case of the above example,
The player can withdraw up to ₹2000 tax-free. (30% TDS on ₹2000 = ₹600)
Financial Year-End Settlement
Suppose a player has any balance (deposit balance + withdrawable balance) in their account at the end of the financial year, i.e. 31st March. In that case, TDS will be deducted from that amount by considering the whole amount as a withdrawal for that financial year.
TDS liability will not be carried forward to the next financial year. The closing balance in a player’s account after the TDS settlement will become the Opening Balance for the next financial year.
Total Withdrawal = Withdrawals made in the FY + Account balance on 31st March.
Net Winnings = Total Withdrawal − Total Deposit − FY Opening Balance
Net Winnings from which TDS has already been deducted will not be considered for the financial
year-end settlement.
Let us understand this with a few examples:
Opening Balance (on 1st April 2023): ₹5,000
Closing Balance (on 31st March 2024): ₹15,000
Withdrawals in FY: ₹0
Total Withdrawal (total account balance is treated as withdrawal) = ₹15,000
| Total Withdrawal (A) | ₹15,000 |
| Total Deposit (B) | ₹5,000 |
| FY Opening Balance, on 1st April (C) | ₹5,000 |
| Net Winnings on 31st March 2024 = (A − B − C ) | ₹5,000 |
| 30% TDS Deduction | ₹1,500 |
₹1500 will be deducted from the total account balance on 31st March 2024.
₹13,500 will be carried forward as the Opening Balance on 1st April 2024, i.e., for the
new financial year.
Opening Balance (on 1st April 2023): ₹5,000
Closing Balance (on 31st March 2024): ₹5,000
Withdrawals in FY: ₹20,000
TDS already paid during FY = ₹1,500
Total Withdrawal (Withdrawals in FY + Closing Balance) = ₹20,000 + ₹5,000 = ₹25,000
| Total Withdrawal (A) | ₹25,000 |
| Total Deposit (B) | ₹10,000 |
| FY Opening Balance, on 1st April (C) | ₹5,000 |
| Net Winnings (A - B - C) | ₹10,000 |
| 30% TDS on Net Winnings (D) | ₹3,000 |
| TDS Already Paid (E) | ₹1,500 |
| Final Settlement TDS Due (D - E) | ₹1,500 |
₹1500 will be deducted from the player’s wallet on 31st March 2024.
₹3,500 will be carried forward as the Opening Balance on 1st April 2024.
Opening Balance (on 1st April 2023): ₹5,000
Closing Balance (on 31st March 2024): ₹5,000
Withdrawals in FY: ₹15,000
TDS already paid during FY = ₹1,500
Total Withdrawals (withdrawals + closing balance) = ₹15,000 + ₹5,000 = ₹20,000
| Total Withdrawal (A) | ₹20,000 |
| Total Deposit (B) | ₹10,000 |
| FY Opening Balance, on 1st April (C) | ₹5,000 |
| Net Winnings (A - B - C) | ₹5,000 |
| 30% TDS on Net Winnings (D) | ₹1,500 |
| TDS Paid Already | ₹1,500 |
| Final Settlement TDS Due (D - E) | ₹0 |
No TDS will be deducted from the player’s account balance on 31st March 2024.
₹5,000 Closing Balance will be carried forward as the Opening Balance on 1st April
2024.
Opening Balance (on 1st April 2023): ₹5,000
Closing Balance (on 31st March 2024): ₹2,000
Withdrawals in FY: ₹15,000
TDS already paid during FY = ₹1,500
Total Withdrawal (withdrawals + closing balance) = ₹15,000 + ₹2,000 = ₹17,000
| Total Withdrawal (A) | ₹17,000 |
| Total Deposit (B) | ₹15,000 |
| FY Opening Balance, on 1st April (C) | ₹5,000 |
| Net Winnings (A - B - C) | -₹3,000 |
| 30% TDS on Net Winnings (D) | ₹0 |
| TDS Paid Already | ₹1,500 |
No TDS will be deducted from the player’s account balance on 31st March 2024.
₹2,000 Closing Balance will be carried forward as the Opening Balance on 1st April
2024.
In this case,
TDS liability on 31st March = ₹0
Excess TDS Paid = ₹1,500
The player will have to claim a TDS refund from the Income Tax Department when they file their ITR.
Prizes other than Cash
When a player wins non-cash prizes (white goods) like cars, motorbikes, gadgets, etc., they will have to pay 30% TDS to PokerStars before receiving the prize.
PokerStars will remit the TDS to the government on the player’s behalf and issue the player a TDS certificate.
Things to Remember
- PAN verification is mandatory for making any withdrawal.
- Players will get a TDS certificate for tax filing after the quarter ends.
- Players can check the Tax Sheet in the ”Account Summary” section of PokerStars.
- Net Winnings: Net Winnings > ₹0
30% TDS shall be deducted from your Net Winnings. The remaining account balance will be carried forward as the opening balance for the next financial year and will be tax-free. - Negative Net Winnings: Net Winnings ≤ ₹0
No TDS will be deducted. The entire account balance will be carried forward as the opening balance for the next financial year and will be tax-free.
Topics
- What’s New?
- What does it mean for players?
- Where can I see my tax summary?
- Monthly Tax Refund - A PokerStars Initiative
- Financial Year-End Settlement
- What happens if I pay TDS on Winnings in 1 month & then incur losses in another month?
- FAQ
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Thank you!