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How to compute ‘Net Winnings’ from online games u/s 115BBJ & 194BA: CBDT
- Central Board of Direct Taxes published Notification No. 28/2023 on May 22, 2023, announcing the new Rule 133 under the Income-tax (Fifth Amendment) Rules, 2023. Above new income tax rule prescribed, How to calculate 'Net Winnings' from online games under sections 115BBJ & 194BA the IT Act
- The new rule describes how to compute 'Net Winnings' from online gaming for Sections 115BBJ and 194BA.
- This above Amending regulation also changed certain forms pertaining to TDS/TCS to reflect changes made by the Finance Act of 2023.
- The Income-tax (Fifth Amendment) Rules, 2023, have been notified by the Central Board of Direct Taxes as new Rule 133 : Complete Notification No 28/2023
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It is to be noted that “Goods and services Tax will not be included on valuation of winnings for Tax deducted or collected at source u/s 194BA of the Act”
Q : Above CBDT Guidelines issued after 1 April 2023 while the Income tax law has come into effect from 1.4.2023. Will there be any which reduce of penalties in this interim period, that is, between 1.4.2023 and the day in 2023 on which the Rules I guidelines are issued?
Answer: Prior to the issuance of Rule 133 or this guidance, taxpayers were supposed to deduct tax at source under Section 194BA. It is assumed that they have fulfilled that duty. But if there is a shortfall in TDS due to a delay in the issuance of Rule 133 or this Circular, that shortage may be filed with the TDS for the month of May 2023 by the 7th of June 2023. There will be no consequences in that case.
