New Tax Rule: TDS on Online Game Winnings from April 2023, 30% Deduction Applies, No Threshold Limit

Section 194BA of the Income Tax Act, effective from April 1, 2023, mandates that any person responsible for paying winnings from online games must deduct tax at source (TDS) on net winnings in the user's account. Tax is deducted at the end of the financial year or at the time of withdrawal. If winnings are wholly or partly in kind, the payer must ensure tax is paid before releasing winnings. There is no threshold limit, and the TDS rate is 30%, subject to increase by surcharge and cess for non-residents. The Central Board of Direct Taxes (CBDT) can issue guidelines to address difficulties in implementing these provisions.