PokerDangal New TDS Policy
Effective 1stApril 2020, PokerDangal introduces a new policy for taxation on winnings in cash games and tournaments. TDS will be applicable on Net Winnings calculated at the time of Poker Chips to Player Wallet Conversion.
New TDS Policy
• 30% TDS will be deducted on Net Winnings of 10,000 & above at the time of Poker Chips to Player Wallet Conversion
• As per the new policy, Net Winnings will be calculated every time a user coverts Poker Chips to Player Wallet. Net Winnings = Total Withdrawal – Total Deposit
• The Net Winnings will be calculated based on overall gameplay in a Financial Year.
• The first 9,999 winnings are TDS free, hence TDS will be calculated on Net winnings – 9,999
In the above statement, Withdrawal mean Poker Chips converted to Player Wallet & Deposit means amount being converted from Player Wallet to Poker Chips.
Q. How is the TDS calculated on winnings?
As stated above, TDS is calculated on Net Winnings of Rs 10,000 & above (Total Withdrawal - Total Deposit) at the time of Poker Chips to Player Wallet conversion. Net Winnings is calculated every time you convert Poker chips to Player Wallet. This gives you the benefit of covering all wins/losses in a Financial Year.
To understand more, take a look at the below scenarios:
To start, you deposit Rs 1,000 in your Player wallet &then convert to Poker Chips to play cash games. You leave seat with 10,000 which is credited to your Poker Chips. Now, you convert Poker chips to Player Wallet.
Net Winnings = 10,000 – 1,000 = 9,000
10,000 will be added your Player Wallet without TDS. You may withdraw it or reuse to play games.
You put 3000 in your Player wallet again and convert to Poker chips. With 1,000 chips you take seat on a cash table and leave seat with 10,000. This 10,000 gets added to your Poker Chips, the balance is now 12,000.
Again you play a tournament with buy-in 500 & win 10,000. This 10,000 tournament win is also added to Poker chips. You Poker Chips balance is now 21,500.
Now, you convert Poker chips to Player Wallet.
Net Winnings = Total Withdrawal (10,000+21,500) – Total Deposit (1,000+3,000) = 27,500 which is greater than 10,000.
30% TDS will be deducted on 17,500. 22,250 will be added to your Poker Wallet after 5,250 TDS.
On any day, your net winnings at the time of Poker Chips to Player Wallet conversion goes below 10,000. Once again, No TDS will be deducted. E.g. your total deposits in Poker Chips before the end of FY is 40,000 but your total withdrawal till date is 48,000. Hence, no TDS will be deducted.
Important Rules Regarding TDS calculation on Winnings:
1. PokerDangal does not allow the partial transfer of Poker chips to Player Wallet. Players have to compulsorily transfer all existing Poker chips to their Player Wallets when they want to convert. However, Net Winnings is not calculated based on the session. It is always calculated for the year.
2. You may maintain your Poker chips as it is till 31st March of each year, after which PokerDangal will automatically transfer all Poker chips to Player Wallet and deduct tax accordingly based on net winnings for the year. This is done as per Government of India regulations to calculate net winnings of each player for the complete financial year and issue TDS Form 16.
3. At the end of every financial year i.e. 31st March, all the Poker sessions are ended and Poker chips are automatically transferred back to your Player Wallet. This happens without any user action and is mandatory and done automatically by the server. The conversion will be done at 11:59:59PM 31st March.
4. PokerDangal calculates TDS on the basis of Section 194B of Income Tax Act. You will get a TDS certificate from us which you can use at the time of filing your annual IT return. We submit the TDS to the government in the first week of every month and file a TDS return every quarter-end. Your Pan number is required to apply for TDS certificate.
5. As per the Indian Income Tax Act, every person is liable to pay his due taxes to the government on his own. PokerDangal is not responsible to fulfil player’s personal tax-related liabilities in any situation. It is advisable to hire the services of a professional financial accountant to calculate and file income tax returns.
Additional points and clarifications
• KYC checks – For Transfer from Poker Chips to player wallet, KYC completion is necessary
• The Deposit and Win balance from Poker chips is to be transferred to Player wallet. Promo balance to stay in Poker Chips only
• Players shouldn’t be seated on tables / Registered the tourney during Chips to Wallet transfer.