Form 26QE is a challan-cum-return statement for reporting the transactions liable to TDS on transfer of Virtual Digital Assets (such as Cryptocurrency) u/s 194-S.
Explains TDS on Virtual Digital Assets (VDA), applicability, threshold limits, rates of TDS, Time of Deduction, requirements to prepare TDS return and filing TDS under Section 194-S
This document covers
- What is Section 194S? and Details
- What is Form 26QE and How to file online?
1. Background : TDS on payments for the transfer of VDA
Provisions relating to tax deduction at source (TDS) on virtual digital assets (VDA) were included in the Budget 2022 document. The Income Tax Act of 1961 was amended to include a new section 194S, which deals with TDS on the transfer of VDA.
2. What is Section 194S?2.1 Applicability
: Every person (buyer of VDA) who is responsible for paying any sum to any resident transferor
(seller of VDA) is required to deduct TDS. Section 194S is applicable w.e.f 01st July 2022
NOTE : This section is not applicable if the seller of VDA is non-resident. Section 195 covers the Non-Resident Payments 2.2 Threshold Limit
2.3 Rate of TDS
- Individual/HUF whose total sales or turnover does not exceed Rs 1 crore in case of business and Rs 50 lakhs in case of profession during the financial year immediately preceding the financial year in which such VDA is transferred : TDS is required to be deducted only if the consideration paid exceeds Rs 50,000
- Other than Individuals/HUF mentioned above(Exchanges/any other person) : TDS is required to be deducted only if the consideration paid exceeds Rs 10,000.
: The rate of TDS to be deducted is 1% on the consideration payable or paid.2.4 Time of Deduction
: The TDS needs to be deducted on the following times whichever is earlier.
2.5 Requirement of TAN
- Credit of amount to the account of resident Seller of VDA (or)
- Payment of amount to resident Seller of VDA
: TAN is not required to be deducted for deduction of TDS u/s 194S.2.6 TDS Return
- The TDS deducted u/s 194S by Individual/HUF whose total sales or turnover does not exceed Rs 1 crore in case of business and Rs 50 lakhs in case of profession needs to be deposited to Government in Form 26QE (Challan cum Return)
- The TDS deducted u/s 194S by other than individuals/HUF (exchanges/any other person) needs to be deposited to Government in Challan 281 and file Form 26Q returns quarterly. (TDS returns and payments are separate)
Finish in 7 mins
3. What is Form 26QE and How to file online?3.1 Form 26QE
is a challan cum return statement for reporting the transactions liable to TDS on purchase of Virtual Digital Assets (VDA) u/s 194S3.2 Due Date
: The due date for filing Form 26QE is within 30 days from the end of month in which tax deduction is made.
NOTE : Mr Arjun has purchased VDA from Mr Karna of Rs 60,000 on 15th March 2023. Mr Arjun is required to deduct TDS @ 1% on 15th March 2023 and file form 26QE within 30 days from the end of March 2023 i.e., April 30 2023. 3.3 Form 26QE can be filed usinghttps://www.incometax.gov.in/iec/foportal/3.4 Required Details for Filing Form 26QE
: The following are the required details
- PAN and Name of Buyer
- PAN and Name of Seller
- Address of Buyer and Seller
- Mobile No and email id of Buyer and Seller
- Total Value of Consideration of VDA
- Date of Transfer of VDA
- Date of Payment of Consideration of VDA and Date of TDS Deduction
- Whether payment made in kind or in exchange of another VDA
- Your Bank Payment Details to Pay
More on Crypto currencies in India
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