Applicability of Section 194BA:
The financial minister Nirmala Sitharaman introduced to new section 194BA in the Union Budget 2023 and This section will be applicable from 1st July 2023.
As per the provision of section 194BA, if any assessee earned income by way of winning from any online game during the financial year, then the payer responsible for paying such income shall deduct TDS from the net winnings at the end of the financial year.
Rate of TDS :
- The payer shall deduct the TDS @30% on the net winning from any online game during the financial year
- The payer shall deduct tax either during the financial year in case of withdrawal or at the end of the financial year.
Threshold limit for TDS:
There is no threshold limit on the amount, and the tax will be deducted from the entire net winning amount. Section 194BA means that the TDS on winnings will now be deducted even below Rs 10,000.(before Budget the threshold limit is 10,000)
Due Date to deposit TDS u/s 194BA
The Deductor is liable to deposit TDS with the Government with following dates:
| Particulars | Due date of Deposite |
|---|---|
| April-February | 7th of Next following next Month |
| March month | 30th April |
TDS Return Due Dates:
If the payer has deducted tax on the net winning amount under section 194BA, then the payer will be responsible to file a quarterly return of TDS in Form 26Q within the due date.
| Quarter | Due Date for Return |
|---|---|
| April to June | 31st of July |
| July to September | 31st of October |
| October to December | 31st of October |
| January to March | 31st of May |
TDS Certificate:
The payer shall issue a certificate in Form 16A to the user whose tax has been deducted from online games.
Important FAQ’s:
Q-1)Is there any threshold limit for the deduction of tax on the winning amount?
Answer:
No, there is no threshold limit for a tax deduction on the winning amount. The payer shall deduct tax on the entire net winning amount at the rate of 30%.
Q-2) What is the difference between Section 194B and 194BA?
Answer:
Section 194B is for a tax deduction on winning from the lottery and the crossword puzzle. While section 194BA is for a tax deduction on winning from online games.
