CBDT notified insertion of clauses in Rule 31A(4) regarding details required for TDS deduction in respect of cash withdrawal u/s 194N and of winning of games u/s 194BA. New Rule has also been inserted (Rule 133) regarding computation of net winning from online games with formulas, for the purpose of Sections 115BBJ and 194BA. CBDT also notified revised Form 16, Form 26Q, 27Q and 27EQ

 In rule 31A, in sub-rule(4) with effect from 1st July 2023,–– 

(a) for clause (ix), the following clause shall be substituted namely:-

“(ix) furnish particulars of amount paid or credited on which tax was not deducted or deducted at lower rate in view of the notification issued under second proviso to section 194N or in view of the exemption provided in fourth proviso to section 194N or in view of the notification issued under fifth proviso to section 194N;”

(b) in clause (xvii), after sub-clause (a), the following sub-clause shall be inserted, namely:- “(aa) winnings in terms of sub-section (2) of section 194BA;”.

“Rule 133. 

(1) Net winnings from online games during the previous year, for the purposes of section 115BBJ, shall be calculated using the following formula, namely:– 

Net winnings =(A+D)-(B+C), 

where – A = Aggregate amount withdrawn from the user account during the financial year; 

B = Aggregate amount of non-taxable deposit made in the user account by the assessee during the financial year; 

C = Opening balance of the user account at the beginning of the financial year; and 

D= Closing balance of the user account at the end of the financial year. 

(2) Net winnings comprised in the first withdrawal during the financial year, for the purposes of section 194BA, shall be calculated using the following formula, namely:– 

Net winnings =A-(B+C), 

where – A = Amount withdrawn from the user account; 

B = Aggregate amount of non-taxable deposit made in the user account by the owner of such account during the financial year, till the time of such withdrawal; and 

C = Opening balance of the user account at the beginning of the financial year. 

(3) Net winnings in the formula given in sub-rule (2) shall be zero, if the sum of amounts B and C is equal to or greater than the amount A. 

(4) Net winnings comprised in each subsequent withdrawal during the financial year, for the purposes of section 194BA, shall be calculated using the following formula, namely:– 

Net winnings =A-(B+C+E), 

where – A = Aggregate amount withdrawn from the user account during the financial year till the time of subsequent withdrawal including the amount of such subsequent withdrawal;  

B = Aggregate amount of non-taxable deposit made in the user account by the owner of such account during the financial year, till the time of such subsequent withdrawal; 

C = Opening balance of the user account at the beginning of the financial year; and 

E= Net winnings comprised in the earlier withdrawal or withdrawals computed under sub-rule (2), or under this sub-rule, during the financial year till the time of subsequent withdrawal if tax has been deducted in accordance with the provision of section 194BA on winnings comprised in such withdrawal or withdrawals. 

(5) Net winnings in the formula given in sub-rule (4) shall be zero, if the sum of amounts B, C and E is equal to or greater than the amount A. 

(6) Net winnings comprised in the user account at the end of the financial year, for the purposes of section 194BA, shall be calculated using the following formula, namely:– 

Net winnings =(A+D)-(B+C+E), 

where – A = Aggregate amount withdrawn from the user account during the financial year; 

B = Aggregate amount of non-taxable deposit made in the user account by the owner of such account during the financial year; 

C = Opening balance of the user account at the beginning of the financial year; 

D= Closing balance of the user account at the end of the financial year; and 

E= Net winnings comprised in the earlier withdrawal or withdrawals computed under sub-rule (2), or sub-rule (4), during the financial year if tax has been deducted in accordance with the provision of section 194BA on winnings comprised in such withdrawal or withdrawals. 

(7) Net winnings in the formula given in sub-rule (6) shall be zero, if the sum of amounts B, C and E is equal to or greater than the sum of amount A and D. 

Notification No. 28/2023 dated 22.05.2023

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