The new Govt. Tax (TDS) law, as defined in the Finance Act, 2023, has been in effect since 1 April 2023. According to the law, 30% of your taxable amount (net winnings) is deducted as TDS on withdrawal.

How is taxable amount calculated for the financial year (FY)?

The taxable amount is defined as the difference between your withdrawals and deposits in the FY. Here’s how the taxable amount is calculated:

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‍Taxable amount will be ₹0 until a withdrawal amount of greater than ₹2,000 is requested

Example 1(a): You have ₹0 opening balance, deposited ₹2,000 during this FY and make the 1st withdrawal of ₹1,000 in this FY

Example 1(b): You have ₹500 opening balance, deposited ₹2,000 during this FY and make the 1st withdrawal of ₹1,000 in this FY

In this case you have a opening balance (Deposits + Winnings) of ₹500 at the start of the financial year i.e. 1st April

Example 2(a): You have ₹500 opening balance, deposited ₹2,000 during this FY and make the 1st withdrawal of ₹3,000 in this FY

In this case you have positive net winnings and you are withdrawing more than your deposits and opening balance combined

Example 2(b): You deposited another ₹2,000 and are now making a subsequent withdrawal of ₹5,000

In this case you have positive net winnings and you are withdrawing more than your deposits and opening balance combined