What is TDS?

TDS is defined as ‘Tax Deducted at Source’ and is implemented on your Net Winnings. As per Finance Act 2023, Section 194BA, TDS was introduced by the Government of India on Net Winnings at the end of the financial year i.e. 31st March or at the time of withdrawal of winnings for all skill-based Real Money Gaming Applications. The TDS amount deducted from your Ziffi Chess Wallet is deposited with the Government of India.

What are Net Winnings?

We’ll go by 2 examples here on how net winnings are calculated. To make it simple, we’ll follow an example of our Ziffi Chess player Ankit.

Scenario 1:

Ankit loves playing Ziffi Chess and wants to recharge his Wallet with ₹1000. At the end of the financial year, Ankit withdraws an amount of ₹4000.

So, Withdrawal – Deposit = Net Winnings
Here, the Net Winnings is ₹3000 and Ankit has to pay 30% TDS on ₹3000 which is 900.
Here ₹900 will be tagged as TDS Paid by Ankit.
Net Final Amount of ₹2,100 will hit Ankit’s Bank Account.

Scenario 2:

Suppose Ankit deposited ₹1000 and withdrawn ₹800 during the financial year in his Ziffi Chess wallet. How much will TDS be charged to him?

Deposit	Withdrawal	Net Winnings
1000	800	-200

Since Net Winnings is negative here i.e. -₹200, the withdrawal amount would not be eligible for TDS.
Net Final Amount of ₹800 will hit Ankit’s Bank Account.

Scenario 3:

Suppose Ankit has some remaining balance in his Ziffi Chess wallet at the end of the financial year (i.e. 31st March), then it’ll be considered a ‘withdrawal’ and TDS will be deducted from it. Please refer to the table below for an explanation.

Opening Balance (1st April 2023)	Total Deposit	Total Withdrawal	Closing Balance (31st March 2024)	Opening Balance (1st April 2024)
1500	2000	3000	4000	3850

Calculation for Net Winnings here:
= (Total Withdrawal) + (Closing Balance) – (Total Deposit) – (Opening Balance)
=(₹3000 + ₹4000) – (₹2000 + ₹1500)
= ₹3500 is Net Winnings here

30% TDS of ₹3500 is 1050
Out of ₹1050, ₹900 of tax is already paid (Total Withdrawal * 30% TDS Rate)
The remaining TDS to be deducted is ₹150.
The remaining TDS will be deducted from the Closing balance of Ziffi Chess Wallet and carried forward to the next Financial year i.e. ₹4000 – ₹150 = 3850.

If my ‘Net Winnings’ go down during the year, Will I get a refund on the TDS already deducted?

TDS on Net Winnings at the time of withdrawal or end of the financial year is paid to the Income Tax Department. Players can file their ITR and claim refunds subject to the player’s overall tax liability. DAB Games Pvt. Ltd. will be issuing the TDS certificate i.e. Form16A.

For any TDS-related issues on Ziffi Chess, feel free to contact hello@ziffichess.com. Also, download our app from ziffichess.com to win money and play with your friends for free. Play Ziffi and Win Cash…!!

Information provided on this page is purely for educational purposes only and does not constitute tax advisory or recommendations. Players should consult their tax advisors and consultants for specific queries about their tax liability and tax-related matters.