The Income Tax (the Fifth Amendment) Rules, 2023 has been notified by the Central Board of Direct Taxes, CBDT.
The Central Board of Direct Taxes, CBDT has notified the new Rule 133, wherein it prescribed a manner for computing “net winnings” from online games as stated under sections 115 BBJ and the section 194BA of the Income Tax Act, 1996.
The court in the case observed and has clarified that whenever there being a payment to the user in kind or in cash, or partly in kind and partly in cash, which is not from the user account, therefore, the provision of the said rule shall apply to calculate net winnings by deeming that the money equivalent to payment has been deposited as a taxable deposit in the user account. Thus, the equivalent amount has to be withdrawn from the user account at the same time and the same shall accordingly be included in the amount A.
The court in the case stated that whenever there being multiple user accounts of the same user, each user account shall be considered for the purposes of calculating net winnings, and the deposit, the withdrawal, or the balance in the user account shall mean the aggregate of the deposit, withdrawal, or the balance in all the user accounts.