TDS on online gaming winnings: relaxation for insignificant withdrawals, but tax applies once cumulative winnings breach threshold.
CBDT guidelines permit a relaxated TDS regime for insignificant withdrawals from online gaming wallets where monthly net winnings in withdrawn amounts do not exceed a small threshold, provided deferred tax is later deducted when cumulative net winnings exceed the threshold or at financial year end. The deductor must pay any shortfall if the user's wallet balance is insufficient at the time of deduction. Aggregation of withdrawals and computation of net winnings determine the triggering of TDS, and practical interpretation affects whether deduction is monthly or upon cumulative threshold breach. (AI Summary)