TDS Policy:

In accordance with the provisions enclosed in Finance Act, 2023, subsequent TDS guiding principle is valid for all players on LIfe11 from 1 Apr, 2023.

Hence, Net Profits = Total Withdrawals - Total Deposits (in a financial year). A financial year is defined as the period from April 1 to March 31.

How TDS was calculated before April 1, 2023:

How does the current TDS policy differ from the one that was in place for the fiscal years 2022–2023?

  • TDS is imposed at the time of withdrawal or redemption of a deposit.
  • Any positive net earnings at the time of withdrawal are entitled to a 30% TDS.
  • TDS is also payable on year-end wallet balances by classifying them as withdrawals at the end of the fiscal year. The leftover sum will be carried over as a deposit balance to the following fiscal year once TDS has been applied to the remaining balance (in accordance with policy). The carried forward balance will be treated as an investment for the next year, and TDS will not be charged on that amount.
  • Prior to April 1, 2023, TDS was calculated at the game level when wins exceeded 10K.
  • As an instance, in the past, if I won Rs. 11,000 in a game, 30% TDS, or Rs. 3300, would be subtracted, leaving Rs. 7700 in my withdrawal pocket.
  • From April 1, if I win any money, suppose Rs. 11,000, NO TDS would be taken off when that money is credited to my withdrawal wallet. The winner would receive the whole Rs 11000 in their wallet.
  • We will only consider the user's net earnings and the appropriate TDS basis when they attempt to withdraw any money from their wallet.
  • We shall thus only take TDS out when the running total of withdrawals exceeds the running total of deposits. No TDS will exist if the user is at a loss. So, the users will benefit from this.

Please be aware that the TDS Policy is based on the interpretation of the laws adopted or changed by the Finance Act of 2023, and the Company has the right to alter, revise, or amend the TDS Policy based on the legislation in effect at the time. The finance bill amendment, which states that the policy will be enforced beginning April 1, 2023, rather than July 1, 2023, are attached (Refer to Page 10, Row 31 and 32).

In what ways does it impact players?

See a few examples of applications of the aforementioned TDS Policy below.

Case 1: 30% TDS will be subtracted from your net earnings at the time of withdrawal if your net winnings (including the withdrawal amount) are more than 0.

Example:

There were 5,000 withdrawals overall during fiscal year (A).

Deposits amounted to 10,000 during the financial year (B).

If you choose to withdraw 7,000 in the aforementioned situation, your net gains will be as follows:

Amount being withdrawn by the player(C)

7,000

Net gain (A+C - B)

2,000

30% TDS Applicable on Net Winnings(D)

600

Amount to be credited in the bank account(C-D)

6400

Zero TDS Withdrawal Amount:

If you withdraw up to Rs. 5,000, there won't be any TDS taken out because your net earnings will be Rs. 0 (i.e., Rs. 5,000 plus Rs. 5,000 less Rs. 10,000). The calculation is shown below:

Withdrawals overall during the fiscal year (A)

5,000

Deposits made overall for the fiscal year (B)

10,000

The sum the player is withdrawing (C)

5,000

Net gains = (A+C-B)

0

Case 2: TDS is not applied to withdrawals if you have previously paid TDS for prior withdrawals, up until your net gains exceed the amount for which you have already made a TDS payment.

Example:

Withdrawals overall during the fiscal year

?20,000

Deposits made overall for the fiscal year

?20,000

TDS was paid throughout the fiscal year.

(TDS paid as you initially had positive net profits of Rs.6,000; earnings of Rs. 6,000 were subject to TDS)

?1,800

No TDS will be applied in this case until your net winnings exceed 6,000 (winnings have already been taxed):

Zero TDS Withdrawal Amount:

No TDS is due if you withdraw up to 6,000.

If you withdraw Rs. 10,000, 30% TDS will only be applied on the first Rs. 4,000 in earnings, or Rs. 1,200.

Case 3: You paid TDS on your first gains throughout the financial year, but after that, your net winnings decreased.

(A) Financial year's worth of withdrawals amounted to 40,000.

Deposits totaled for the financial year (B)

20,000

Net profits for fiscal years (A - B) were

20,000

TDS paid thus far is

Rs. 6,000.

Following this, if your net profits drop to 10,000, subject to any relevant legislation, you may seek a refund for the excess TDS that was deducted from your yearly income tax filing.

Case 4: If you have money in your account at the end of the fiscal year, TDS will be calculated on that money by treating it like a withdrawal for the fiscal year; the leftover money will be carried over to the next year as a beginning deposit amount. In the following year, withdrawals from the initial deposit amount won't be taxed.

For instance:

Total withdrawals made throughout the fiscal year (A)

?40,000

Deposits totaled 40,000 for the financial year (B).

TDS paid to date (C)

(On earnings of Rs. 5,000 given that your original net winnings were positive).

?1,500

30000 will be the account balance as of March 31, 2024(D).

In the example above, the computation is made as follows:

Total withdrawals in the financial year(A+D)

?70,000

Total deposits in the financial year(B)

?40,000

Net winnings(A+D-B)

?30,000

30% TDS Applicable on Net Winnings(E)

?9,000

TDS paid till date(C)

?1,500

TDS Remaining to be paid(E-C)

?7,500

Hence, as of March 31, 2024, your account balance has been reduced by 7,500 TDS, and the remaining balance of 22,500 will be used as a deposit for the next fiscal year. For withdrawals from this amount in the upcoming fiscal year, there will be no TDS due.

Important Note: Any money left on the table at the conclusion of the fiscal year will not be factored into the beginning balance for the next year.