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Senior tax consultants in India have recommended the TDS Policy implemented at magicland.games, highlighting its long-term advantages for players and the card game industry alike.
For Reference:
Net winnings = Difference between Total Withdrawals in a financial year and Total Deposits in the same financial year. Financial year is counted from 1st April to 31st March.
1. If your net winnings upon withdrawal exceed the total deposited amount, a 30% TDS will be applied to the withdrawn sum.
For instance: If your total deposits during the current financial year at the time of withdrawal amount to 15,000 and your total withdrawals during the same period amount to 16,000, the following applies: a 30% TDS deduction will be made on the 1,000 rupees being withdrawn.
2. If your net winnings upon withdrawal are less than your total deposit amount, TDS will not apply to any withdrawn amount unless the withdrawal increases your total withdrawals beyond your total deposits.
For example: If your total deposits during the current financial year at the time of withdrawal amount to 15,000 and your total withdrawals amount to 7,000, the following applies: If you withdraw up to 8,000, no TDS deduction will occur. If you withdraw 10,000, a 30% TDS deduction will be made only on the excess amount beyond your total deposits, which is 2,000 rupees.
3. If you've had TDS deducted from an earlier withdrawal and your net winnings subsequently fall below your total deposit amount, you can withdraw without facing any TDS deduction until your net winnings plus the previously TDS-deducted amount reach your total deposit amount.
For instance: let's say your total deposits for the current financial year stand at ₹50,000 at the time of withdrawal, and your total withdrawals amount to ₹40,000. You've already paid ₹6,000 as TDS for the current financial year on a winning amount of ₹20,000. Here's how it works: If you withdraw up to ₹30,000, there will be no TDS deduction. If you withdraw ₹50,000, there will be a 30% TDS deduction, but only on the ₹20,000 amount that has not yet had TDS deducted.
According to the Finance Act 2023, all Real Money Gaming Apps are required to deduct tax at a rate of 30% on users' net winnings either at the time of withdrawal or by the end of the financial year.
Tax will be computed on the net winnings and subtracted when a user initiates a withdrawal, limited to the extent of the tax obligation. Additionally, by the end of the year (March 31), the cumulative tax due on the net winnings throughout the year will be determined and deducted from the player's wallet.
The tax deducted on net winnings during withdrawals is remitted to the income tax department for the player's credit. Players can file their returns with the income tax department and claim refunds based on their overall tax liability. Magic Rummy will issue tax deduction certificates displaying the deducted tax for the player. However, Magic Rummy cannot directly refund any excess TDS to players from their end.
Tax certificates will be issued within one month from the final date of filing TDS returns for each quarter.