CBDT Notifies The Procedure To Compute ‘Net Winnings’ From Online Games

The Central Board of Direct Taxes (CBDT) has notified the Income Tax (Fifth Amendment) Rules, 2023.

The Board has notified a new Rule 133, which prescribes a manner for computing "net winnings" from online games under sections 115 BBJ and 194BA of the Income Tax Act, 1961.

It was clarified that whenever there is payment to the user in kind or in cash, or partly in kind and partly in cash, which is not from the user account, the provisions of this rule shall apply to calculate net winnings by deeming that the money equivalent to payment has been deposited as a taxable deposit in the user account. The equivalent amount has been withdrawn from the user account at the same time and shall accordingly be included in amount A.

Whenever there are multiple user accounts of the same user, each user account shall be considered for the purposes of calculating net winnings, and the deposit, withdrawal, or balance in the user account shall mean the aggregate of the deposit, withdrawal, or balance in all user accounts.

Notification No. 28/2023

Dated: 22.05.2023

Click Here To Read The Notification