TDS Policy

In line with the provisions contained in Finance Act, 2023, following TDS policy is applicable for all players on Ludo Culture from 1 Apr, 2023.

  • TDS is applicable at the time of withdrawal or deposit refund
  • 30% TDS is applicable on any positive net winnings at the time of withdrawal
  • TDS is also applicable at the end of financial year on year end wallet balance by considering it as a withdrawal amount. Post applying TDS on the remaining balance (as per policy), the remaining amount will be carried forward to the next financial year as deposit balance. Carried forward balance will be considered as investment for next year and TDS would not be applicable for that amount.
  • Here, Net winnings = Total Withdrawals – Total Deposits (in a financial year). Apr 1 to Mar 31 duration is considered a financial year.

    How was TDS deducted before Apr 1, 2023 :

  • Before Apr 1 2023, TDS was deducted at a game level when the winnings were greater than 10K.Example : Previously if I won Rs 11000 in a game, then 30% TDS will be deducted i.e. 3300 and hence Rs 7700 will be credited in the withdrawal wallet.

    How is the current TDS policy different from the last TDS policy of FY 2022- 2023

  • Post Apr 1, if I win some amount let’s assume Rs 11000, NO TDS will be deducted while crediting that amount in the withdrawal wallet. Entire Rs 11000 will be transferred to the winnings wallet.
  • Only when the user will try to withdraw any amount from the wallet, we will look at the net winnings and basis that calculate the TDS applicable.
  • Hence we will deduct TDS only when the withdrawal running total is more than the Deposits. If the user is in loss, there will be no TDS. Hence this will be beneficial to the users.

Please note that the TDS Policy is based on the understanding of the provisions as introduced/ amended by Finance Act, 2023 and the Company reserves its right to modify/ change/ amend the TDS Policy basis law applicable at the relevant time. Attached is the finance bill amendment which says that the policy will be applicable from Apr 1, 2023 rather than July 1, 2023 (Refer to Page 10, Row 31 and 32).

What Does It Mean For Players?

Find below a few scenarios to understand the application of the aforementioned TDS Policy.

Scenario 1: If your net winnings (including the withdrawal amount) is more than 0, then 30% TDS will be deducted on the net winnings at the time of withdrawal.

Example:

Total withdrawals in the financial year(A) ₹5,000
Total deposits in the financial year(B) ₹10,000

In the above scenario, if you want to withdraw ₹7,000 , then the net winnings will be:

Amount being withdrawn by the player(C) ₹7,000
Net winnings(A+C – B) ₹2,000
30% TDS Applicable on Net Winnings(D) ₹600
Amount to be credited in the bank account(C-D) ₹6400

Zero TDS Withdrawal amount: If you withdraw upto ₹5,000 , then there will be zero TDS deducted as net winnings will be ₹0 (₹5,000 + ₹5,000 – ₹10,000). See calculation below:

Total withdrawals in the financial year(A) ₹5,000
Total deposits in the financial year(B) ₹10,000
Amount being withdrawn by the player(C) ₹5,000
Net winnings(A+C – B) ₹0

Scenario 2: If you have paid TDS in previous withdrawals, then no TDS is applicable on withdrawals till your net winnings crosses the amount for which you have already paid TDS.

Example:

Total withdrawals in the financial year ₹20,000
Total deposits in the financial year ₹20,000
TDS paid in the financial year

(TDS paid on winnings of ₹6,000 as initially you had positive net winnings of ₹6,000)

₹1,800

In this scenario, No TDS applicable till your net winnings crosses ₹6,000 (winnings already taxed):

  • Zero TDS Withdrawal amount: If you withdraw up to ₹6,000, no TDS is applicable
  • If you withdraw ₹10, 000, then 30% TDS is applicable only on ₹4,000 winnings i.e. ₹1,200.

Scenario 3: You have paid TDS on initial winnings during the financial year but your net winnings have reduced post that.

Example:

Total withdrawals in the financial year(A) ₹40,000
Total deposits in the financial year(B) ₹20,000
Net winnings in the financial year(A-B) ₹20,000
TDS paid till date ₹6,000

Post this, if your net winnings reduces to ₹10,000, then, subject to applicable law, the excess TDS deducted can be claimed as refund in your annual income tax filing.

Scenario 4: At the end of the financial year, if you have an amount in your account, then TDS will be calculated on that amount by considering it as a withdrawal of the financial year and remaining amount will be carried forward to next year as starting deposit amount. Withdrawal from the starting deposit amount will not be subject to TDS in the next year.

Example:

Total withdrawals in the financial year(A) ₹40,000
Total deposits in the financial year(B) ₹40,000
TDS paid till date(C)

(on winning amount of ₹5,000 as initially you had positive net winnings of ₹5,000)

₹1,500
Account balance at the end of Mar 31, 2024(D) ₹30,000

In above scenario, following calculation is done:

Total withdrawals in the financial year(A+D) ₹70,000
Total deposits in the financial year(B) ₹40,000
Net winnings(A+D-B) ₹30,000
30% TDS Applicable on Net Winnings(E) ₹9,000
TDS paid till date(C) ₹1,500
TDS Remaining to be paid(E-C) ₹7,500

Thus, ₹7,500 TDS is deducted from your account balance at the end of Mar 31, 2024 and remaining balance of ₹22,500 will be carried forward to the next financial year as deposit amount. You will not have to pay TDS in the next financial year on withdrawal out of this amount.

Special Note: In case you have an amount on the table at the end of the financial year, then it will not be considered in next year’s starting balance.

Updated on 15th February, 2024

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