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:
- A = Total withdrawals (including current withdrawal amount)
- B = Total deposits
- C = Opening balance (deposit + winnings) at FY beginning
- D = Amount on which TDS was deducted till date
1 April to 31 March is considered a financial year (FY).
How is this different from the earlier TDS deduction?
Tax deduction has been updated to make it easier for you.
Here’s how net winnings was calculated earlier:
Taxable Amount (Net winnings) =
Total winnings - (Total Entry - Cash Bonus/Discount)
If you're still unsure about how this affects your withdrawal, check the example given below:
Raj has ₹3,000 opening balance and makes his 1st withdrawal of ₹20,000 in the FY.
| Previous withdrawal | ₹0 |
| Total deposits | ₹10,000 |
| Current withdrawals | ₹20,000 |
| Current winnings | ₹35,000 |
| Total withdrawals A | ₹20,000 |
| Total deposits B | ₹10,000 |
| Opening balance (deposit + winnings) C | ₹3,000 |
| Amount on which TDS was deducted till date D | ₹0 |
| Taxable amount A - B - C - D | ₹7,000 |
| 30% Govt. Tax (TDS) applicable | ₹2,100 |
| Withdrawal after Govt. Tax (TDS) | ₹17,900 |
Let’s see how this would affect your withdrawals in comparison to the old scheme (1 April - 30 April) if you were to withdraw this ₹20,000 in 3 parts.
| 1st | 2nd | 3rd | |
| Withdrawal | ₹7,000 | ₹6,000 | ₹7,000 |
| TDS (1 Apr - 30 Apr) | ₹2,100 | ₹0 | ₹0 |
| TDS (1 May onwards) | ₹0 | ₹0 | ₹2,100 |
| After TDS (1 Apr - 30 Apr) | ₹4,900 | ₹6,000 | ₹7,000 |
| After TDS (1 May onwards) | ₹7,000 | ₹6,000 | ₹4,900 |
Now, let’s look at a few more examples to understand this better:
Raj deposits ₹15,000 and makes the 2nd withdrawal of ₹10,000 in the FY.
| Opening Balance | ₹0 |
| Total deposits | ₹10,000 (previous) + ₹15,000 (current) |
| Current withdrawals | ₹10,000 |
|
Total withdrawals A ₹20,000 (previous) + ₹10,000 (current) |
₹30,000 |
|
Total deposits B ₹10,000 (previous) + ₹15,000 (current) |
₹25,000 |
| Opening balance (deposit + winnings) C | ₹3,000 |
| Amount on which TDS was deducted till date D | ₹7,000 |
| Taxable amount A - B - C - D | ₹0 |
| 30% Govt. Tax (TDS) applicable | ₹0 |
| Withdrawal after Govt. Tax (TDS) | ₹10,000 |
Example 1(a): Priyanka has ₹0 opening balance and makes the 1st withdrawal of ₹10,000 in the FY.
| Opening Balance | ₹0 |
| Previous withdrawals | ₹0 |
| Total deposits | ₹15,000 |
| Current withdrawals | ₹10,000 |
| Total withdrawals A | ₹10,000 |
| Total deposits B ` | ₹15,000 |
| Opening balance (deposit + winnings) C | ₹0 |
| Amount on which TDS was deducted till date D | ₹0 |
| Taxable amount A - B - C - D | ₹0 |
| 30% Govt. Tax (TDS) applicable | ₹0 |
| Withdrawal after Govt. Tax (TDS) | ₹10,000 |
Example 1(b): Priyanka didn’t deposit any money and now makes the 2nd withdrawal of ₹7,000 in the FY.
| Opening Balance | ₹0 |
| Previous withdrawals | ₹10,000 |
| Total deposits | ₹15,000 (previous) |
| Current withdrawals | ₹7,000 |
|
Total withdrawals A ₹10,000 (previous) + ₹7,000 (current) |
₹17,000 |
| Total deposits B ` | ₹15,000 |
| Opening balance (deposit + winnings) C | ₹0 |
| Amount on which TDS was deducted till date D | ₹0 |
| Taxable amount A - B - C - D | ₹2,000 |
| 30% Govt. Tax (TDS) applicable | ₹600 |
|
Withdrawal after Govt. Tax (TDS) ₹7,000 - ₹600 |
₹6,400 |
Example 1(c): Priyanka deposits ₹5,000 and makes the 3rd withdrawal of ₹15,000 in the FY.
| Opening Balance | ₹0 |
| Previous withdrawals | ₹17,000 |
| Total deposits | ₹15,000 (previous) + ₹5,000 (current) |
| Current withdrawals | ₹15,000 |
|
Total withdrawals A ₹17,000 (previous) + ₹15,000 (current) |
₹32,000 |
|
Total deposits B ₹15,000 (previous) + ₹5,000 (current) |
₹20,000 |
| Opening balance (deposit + winnings) C | ₹0 |
| Amount on which TDS was deducted till date D | ₹2,000 |
| Taxable amount A - B - C - D | ₹10,000 |
| 30% Govt. Tax (TDS) applicable | ₹3,000 |
|
Withdrawal after Govt. Tax (TDS) ₹15,000 - ₹3,000 |
₹12,000 |
The extra Govt. Tax (TDS) deducted will be adjusted against your future withdrawals.
The taxable amount at the end of the financial year (31 March) will be subject to Govt. Tax (TDS) at 30%. TDS will be deducted from your closing balance as on 31 March, 2024.
Here, the taxable amount is calculated as
A - B - C - D + E
where E is the closing balance (deposit + winnings)
| Previous withdrawals | ₹0 |
| Total deposits | ₹20,000 |
| Opening Balance | ₹5,000 |
| Deposit (as on 31 March, 2024) | ₹15,000 |
| Winnings (as on 31 March, 2024) | ₹15,000 |
| Total withdrawals A | ₹0 |
| Total deposits B ` | ₹20,000 |
| Opening balance (deposit + winnings) C | ₹5,000 |
| Amount on which TDS was deducted till date D | ₹0 |
|
Closing balance E ₹15,000 + ₹15,000 |
₹30,000 |
| Taxable amount A - B - C - D + E | ₹5,000 |
| 30% Govt. Tax (TDS) applicable | ₹1,500 |
No. Don't worry; your account balance holdings before 1 April 2023 will not incur a Govt. Tax (TDS) deduction as per the new update.
No, TDS will be deducted on the taxable amount on every withdrawal and in case of no withdrawals TDS will be deducted from your closing balance at the end of every financial year.
Go to My Balance 
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Click on the transaction for which you want to see the details.
You can check out the detailed Govt. Tax (TDS) breakup and download the Govt. Tax (TDS) certificate at the end of each quarter.
No Govt. Tax (TDS) will be applicable in case of net loss at the time of withdrawal or at the end of the financial year.
Don’t worry; you can claim your Govt. Tax (TDS) refund when filing your Income Tax Returns (ITR) for that financial year. Make sure to download your TDS certificates from the My Transactions section of the app at the end of each quarter.