Q. Why TDS is deducted on 31st March?
On March 31st of each year, as the financial year comes to a close, a Tax Deducted at Source (TDS) of 30% will be deducted from all remaining net winnings in your wallet. This action is in accordance with government regulations towards the end of every financial year.
Q. Do I have to pay TDS again on the amount that is left in my wallet after TDS deduction?
No, you do not have to pay TDS again on the amount that remains in your wallet after TDS deduction. The TDS deduction is applied once on the net winnings in your wallet at the end of the financial year. The remaining balance in your wallet, including both usable and withdrawable amounts, will be considered as your opening balance for the next financial year.
Q. What happens to the amount deducted as TDS on March 31st?
The amount deducted as TDS on March 31st will be added to your TDS certificate.
Q. What is the TDS policy?
The policy:
From 1st April’23, the Income tax department has introduced a new TDS section for Winnings from online games, i.e., 194BA. The net winnings are calculated at the time when a user places a request for withdrawal (or at the year-end on the closing balance), and TDS is calculated as 30% of the net winnings that constitute the Withdrawal/ Closing Balance at the year-end.
Important points:
- The TDS will be deducted at the time of withdrawal.
- The TDS will be applicable only on net winnings that constitute withdrawals and not deposits.
- Your deposit and withdrawal ledger will become zero at 00:00 hours on the 1st of April in each financial year.
- Net winnings = [Total withdrawals in FY – (Total deposits in FY + Net winnings which have suffered TDS during the FY + Opening balances )]
Q. How is TDS calculated on MPL?
- The TDS will be deducted at the time of withdrawal and at the year end.
- The Financial year is 1st April – 31st March.
- 30% TDS will be applicable if the net winnings of a player are positive. (greater than zero).
Your deposit and withdrawal ledger will become zero at 00:00 hours on the 1st of April in each financial year.
Your net winnings are calculated as follows:
Net winnings = [Total withdrawals in FY – (Total deposits in FY + Net winnings which have already suffered TDS during the FY + Opening balances as of 1st April 00:00)]
If your net winnings at the time of making a withdrawal are positive, 30% TDS will be applicable on any amount being withdrawn.
Let us understand this further with some examples:
Scenario 1:
On 1st April, you have 7000/- in your winnings balance and 8000/- in your deposit balance. Now you try to withdraw 7000/- on 2nd April. No TDS will be applied.
| Total withdrawals in FY | ₹7,000 |
| Total deposits in FY | ₹0 |
| Opening deposit balance | ₹8,000 |
| Net winnings | ₹- 1000 |
| Net winnings on which TDS has been paid | ₹0 |
| TDS@30% on net winnings | ₹0 |
Scenario 2
- Now consider that you deposit 3000 in the current financial year and your opening deposit balance is 8000.
- You have already withdrawn 7000.
- Now you want to withdraw 5000
| Total withdrawals in FY | ₹7,000 + ₹5,000 = 12,000 |
| Total deposits in FY | ₹3,000 |
| Opening deposit balance | ₹8,000 |
| Net winnings | ₹1,000 |
| Net winnings on which TDS has been paid | ₹0 |
| TDS@30% on net winnings | ₹300 |
The Amount that you can withdraw without tax is ₹4000. Tax will be applicable on the remaining ₹1,000. ₹300 will be deducted from ₹1000 and ₹4700 will be added to your bank account.
Scenario 3
If TDS has been applied to your previous withdrawals, then no TDS is applicable on withdrawals untill your net winnings exceed the amount for which you have already paid TDS.
- Your total withdrawals till date is ₹20,000
- Your total deposits in FY is ₹6,000
- Opening deposit balance is ₹8,000
Net winnings on which TDS is paid is ₹6000 (20,000 – (6000 + 8000)).
If you try to withdraw ₹5,500, no TDS will be deducted. You can withdraw upto ₹6,000 without any TDS.
If you wish to withdraw ₹10,000, TDS will be charged on ₹4,000 @30%. ₹1,200 will be deducted and ₹8,800 will be added to your bank account
Q. Does MPL deduct any TDS on my withdrawals?
From 1st April’23, the Income tax department has introduced a new TDS section for Winnings from online games, i.e., 194BA. The net winnings are calculated at the time when a user places a request for withdrawal (or at the year-end on the closing balance), and TDS is calculated @30% on the net winnings comprised in withdrawal/ Closing Balance at year end.
Read more about the policy here.
Q. Will TDS be deducted from my leaderboard winnings?
All winnings from the leaderboard will be added to the winnings wallet without deducting TDS. It will be deducted once you initiate a withdrawal based on your net winnings.
Q. My TDS has been deducted. Do I get any TDS certificate for the same?
MPL deducts TDS and deposits the same with the Government. If you have given MPL your correct PAN number, you can view your TDS deduction details in your 26AS (updated after every quarter). Certificates are also available in the Download section (to put the path from where the user can download from 16 from the app).
Q. Will the ledger reset on the 1st of April of every new Financial Year?
Yes, All deposits and withdrawals will be reset to 0 at 00:00 hrs on 31st March for the purpose of computation of Net Winnings.
Q. What if I end up paying extra TDS?
This can happen in case of a withdrawal being made when net winnings were positive and by the year-end, the user is in net losses. At the end of the financial year 00:00 hrs on 31st March, your final TDS will be calculated depending on the financial year’s net winnings.
Further, since the winnings earned from Online Gaming are taxable at 30%. Users need to file their ITR, and the total TDS deducted can be adjusted against the Winnings liable for tax. If any excess TDS is deducted, the same can be claimed while filing ITR.
Q. Is there any threshold amount above which TDS is applicable?
There is no threshold limit available u/s 194BA of the Income Tax Act, 1961. TDS is applicable whenever a withdrawal request is placed and Net winnings are positive.