Nature of Rewards: YappRoom provides two distinct types of cash incentives:
- Promotional Incentives: Earned via the "Yapp & Earn" Referral Program and "Arena Quests" (Engagement Bounties). These are marketing perquisites.
- Gaming Winnings: Earned via competitive leaderboards, such as the "Daily Mafia Showdown." These are winnings from online games.
Tax Compliance — Promotional Incentives (Section 194R): In compliance with the Income Tax Act, 1961, promotional benefits are subject to TDS under the following rules:
- Under ₹20,000: Users may redeem up to ₹19,999 in promotional FAYR Cash per financial year (April 1 – March 31) via UPI without any tax deduction.
- Crossing the Threshold: If total redeemed promotional FAYR Cash reaches or exceeds ₹20,000 in a single financial year, YappRoom is legally mandated to deduct a 10% TDS on the entire amount earned during that year and on all subsequent promotional redemptions.
Tax Compliance — Online Gaming Winnings (Section 194BA): In accordance with Section 194BA of the Income Tax Act, 1961, any cash prizes won through competitive gameplay, leaderboard rankings, or the "Daily Mafia Showdown" are classified as Net Winnings from Online Games.
- Flat 30% Deduction: All gaming winnings are subject to a flat 30% TDS deduction from the first rupee earned. Unlike promotional incentives, there is no minimum threshold for this deduction.
- Calculation: TDS will be calculated and deducted at the time of withdrawal or at the end of the financial year on the net winnings as prescribed by law.
KYC and PAN Requirements: To process any UPI withdrawals (Promotional or Gaming), users must submit valid KYC documentation. If a user fails to provide a valid PAN card, YappRoom is required by law (Section 206AA) to deduct TDS at a higher penal rate (typically 20% for 194R or as applicable for 194BA).
Right to Adjust: YappRoom reserves the right to adjust wallet balances to recover retroactive TDS liabilities upon crossing statutory thresholds, and to withhold payouts if bot farming, duplicate accounts, or fraud is suspected.