Applicability:
Any person responsible for paying to any resident any consideration for transfer of a Virtual Digital Asset shall deduct tax u/s 194S.
Rate of TDS : 1%
Applicable from: 1st July 2022
Threshold limit :
TDS u/s 194S is not required to be deducted if the consideration does not exceed RS 10,000 during the financial year.
However, the said TDS will not be deducted if the consideration does not exceed RS 50,000 during the financial year in case the deductor is-
- Individual or HUF in business/profession with turnover in business/profession below 1 Cr/50 Lakhs in the financial year immediately preceding the financial year in which such virtual digital asset is transferred.
- Individual or HUF not having income under the head Profits and Gains from Business and Profession.
Important Points:
- In a case where the consideration for transfer of virtual digital asset is—
- wholly in kind or in exchange of another virtual digital asset, where there is no part in cash; or
- partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of such transfer then
the person responsible for paying such consideration shall, before releasing the consideration, ensure that tax required to be deducted has been paid in respect of such consideration for the transfer of virtual digital asset. In case of a transaction to which the provisions of Section 194O as well as Section 194S are applicable then, tax shall be deducted under Section 194S.
