Published on: 25 May 2023 at 12:20 IST
The Income Tax (Fifth Amendment) Rules, 2023 have been notified by the Central Board of Direct Taxes (CBDT).
One of the new rules introduced is Rule 133, which outlines the method for determining the “net winnings” from online games under sections 115 BBJ and 194BA of the Income Tax Act, 1961.
The clarification states that when a user receives payment, whether in the form of goods, cash, or a combination of both, that is not from their user account, the provisions of this rule will be applied to calculate the net winnings. It assumes that an amount equal to the payment has been deposited into the user account as a taxable deposit. Simultaneously, the equivalent amount is withdrawn from the user account, which will be included in the total amount A.
In cases where a user has multiple user accounts, each account will be taken into account when calculating net winnings. The deposit, withdrawal, or balance in each user account will be considered as the combined sum of all user accounts.
Notification No. 28/2023
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