CBDT issued guidelines in exercise of the power conferred by sub-section (3) of section 194BA of the Act in form of Questions and their answers.

Guidelines 

Question 1) There are multiple wallets under one user. How "net winnings" is to be computed with respect to multiple wallets of one user

Question 2) If a user borrows some money and deposits in his user account, will it be considered taxable deposit or non-taxable deposit?

Question 3) How will bonus, referral bonus, incentives etc. be treated?

Question 4) At what point we consider that amount has been withdrawn?

Question no 5) There are a large number of gamers who play with very insignificant amount and withdraw also very small amount. Deducting tax at source under section 194BA of the Act for each insignificant withdrawal would increase compliance for tax deductor. Can there be relaxation to ease compliance? 

Question 6) When the net winnings is in kind how will tax deduction under section 194BA operate?

Question 7) How will the valuation of winnings in kind required to be carried out?

Question 8) These guidelines have been issued after 1.4.2023 while the law has come into effect from 1.4.2023. Will there be any relaxation on penal consequences in the intervening period i.e. between 1.4.2023 and the date on which the Rules I guidelines are issued?  

Circular No. 5 of 2023 dated 22.05.2023 

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