Online gaming: No TDS on winnings up to Rs 100; here's what CBDT's guidelines mean for you

Online gaming: The Central Board of Direct Taxes (CBDT) on Monday issued a new set of guidelines on online gaming platforms, stating that the platforms need not deduct tax at source (TDS) on winnings withdrawn by players if the amount is less than Rs 100 a month and meets certain riders. The CBDT said the guidelines were aimed at addressing difficulties faced by taxpayers.

As per the new guidelines, information such as transactions happening throughout the year in all accounts of the user, taxable income and the deposits as well as incentives doled out by the gaming company has to declared and recorded. Online gaming companies paying any income for referral, promotion or any other item as long as it is used within the game and is not withdrawn will be outside the tax net, according to the CBDT.

Online gaming companies paying any income by way of winnings to the players during the financial year should deduct income tax on the net winnings in his user account as per Section 194BA of the Income Tax Act. The new rules will take effect on July 1.

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