You are here: Home » Markets » Cryptocurrency » news
Business Standard

CBDT issues TDS disclosure requirements for cryptos, virtual digital assets

From July 1, TD) of 1% will be levied on payments towards virtual digital assets or cryptocurrencies beyond Rs 10,000 in a year, as the Finance Act 2022 has introduced Section 194S in the I-T Act

Topics
CBDT | cryptocurrency

Press Trust of India  |  New Delhi 

Photo: Bloomberg
Photo: Bloomberg

The income tax department has come out with detailed disclosure requirements for TDS deductions for virtual digital assets, under which date of transfer and mode of payment will have to be specified.

From July 1, tax deducted at source (TDS) of 1 per cent will be levied on payments towards virtual digital assets or cryptocurrencies beyond Rs 10,000 in a year, as the Finance Act 2022 has introduced Section 194S in the I-T Act.

In the run up to implementation of the new provision, the Central Board of Direct Taxes (CBDT) on June 21 notified certain amendments in I-T Rules with respect to furnishing TDS returns in Form 26QE and Form 16E.

has notified that the TDS collected under Section 194S shall be deposited within 30 days from the end of the month in which the deduction has been made. Deposit of tax so deducted shall be made in the challan-cum-statement Form 26QE.

Nangia Andersen LLP Partner Neeraj Agarwala said to furnish Form 26QE, the specified persons would be required to maintain details like date of transfer of virtual digital assets (VDAs), value of consideration, mode of consideration -- whether cash or kind or in exchange of another VDA etc.

"These forms are in line with the recently introduced provisions of Section 194S. Complying with these sections, the forms require detailed disclosures.

"The specified persons should be well-equipped to understand and obtain the information required for compliance, as well as maintain the appropriate documentation to support these transactions," Agarwala said.

AKM Global Tax Partner Amit Maheshwari said since only a few days are left for the new TDS provisions like Section 194R and 194S to come into play, there was a greater need to have a clarity on the procedural compliances.

"The new forms such as 26QE require detailed information for payments on transfer of VDAs such as the date of transfer of VDA to amount paid/ credited either in cash or kind or in exchange of another VDA. This will help the tax department to trace the VDA transactions," Maheshwari said.

But it will also increase the compliance burden on taxpayers, he added.

The finance ministry is also working on an FAQ on taxation of cryptocurrency, which will give nuanced clarifications on applicability of income tax on virtual digital assets.

The 2022-23 Budget has brought in clarity with regard to levy of income tax on crypto assets. From April 1, a 30 per cent I-T plus cess and surcharges, is levied on such transactions in the same manner as it treats winnings from horse races or other speculative transactions.

A 1 per cent TDS on payments over Rs 10,000 towards virtual currencies has also been introduced which will kick in from July 1. The threshold limit for TDS would be Rs 50,000 a year for specified persons, which include individuals/HUFs who are required to get their accounts audited under the I-T Act.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, June 22 2022. 19:32 IST
RECOMMENDED FOR YOU
.