The Department of Revenue vide notification dated 22nd May, 2023 has issued the Income-tax (Fifth Amendment) Rules, 2023. The amendment provides that the net winnings from online games during the previous year shall be calculated for income tax 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A = Aggregate amount withdrawn from the user account during the financial year;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.