Govt Tax (TDS) Simplified
The new Govt Tax (TDS) law, as defined in the Income Tax Act, 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:
Taxable Amount (Net Winnings) = A - B - C - E
A = Total withdrawals (including current withdrawal amount)
B = Total deposits
C = Opening balance (deposit + winnings) at FY beginning
E = Amount on which TDS was deducted till date
Did you know?
1 April to 31 March is considered a financial year (FY).
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 E
₹0
Taxable amount A - B - C - E
₹7,000
30% Govt Tax (TDS) applicable
₹2,100
Withdrawal after Govt Tax (TDS)
₹17,900
Raj deposits ₹15,000 and makes the 2nd withdrawal of ₹10,000 in the FY.
Opening Balance
₹3,000
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 E
₹7,000
Taxable amount A - B - C - E
₹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 E
₹0
Taxable amount A - B - C - E
₹0
30% Govt Tax (TDS) applicable
₹0
Withdrawal after Govt Tax (TDS)
₹10,000
NOTE: Taxable amount will be ₹0 until a withdrawal amount of more than ₹15,000 is requested.
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 E
₹0
Taxable amount A - B - C - E
₹2000
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 E
₹2,000
Taxable amount A - B - C - E
₹10,000
30% Govt Tax (TDS) applicable
₹3,000
Withdrawal after Govt Tax (TDS)
₹15,000 - ₹3,000
₹12,000
If you have not withdrawn your Net Winnings for the Financial Year yet, applicable TDS will be deducted from your Super6 account at the end of the Financial Year.
How will it be calculated?
Your Taxable Amount (Net Winnings) = A - B - C - E - D where
A = Total withdrawals in the FY
B = Total deposits in the FY
C = Opening balance (Unused Deposits + Winnings) at the beginning of FY
E = Amount on which TDS has been deducted in the FY
D = Closing Balance (Current Balance at the end of the Financial Year, including Unused Deposits and Winnings)
Let’s look at some examples to understand it better:
1. Raj had withdrawn ₹5,000 of his Winnings
Total withdrawals A
₹5,000
Total deposits B
₹10,000
Opening balance C
₹0
Amount on which TDS has been deducted E
₹0
Closing Balance D
₹20,000
Raj’s taxable amount (Net Winnings) at the end of the Financial Year = ₹(5,000 - 10,000 - 0 - 0 + 20,000) = ₹15,000
So Raj’s applicable TDS is 30% of ₹15,000 = ₹4,500
2. Mita had not withdrawn any of her Winnings
Total withdrawals A
₹0
Total deposits B
₹20,000
Opening balance C
₹5,000
Amount on which TDS has been deducted E
₹0
Closing Balance D
₹15,000 + ₹15,000
₹30,000
Mita’s taxable amount (Net Winnings) at the end of the Financial Year = ₹(0 - 20,000 - 5,000 - 0 + 30,000) = ₹5,000
So Mita’s applicable TDS is 30% of ₹5,000 = ₹1,500