Indian Compliance & Tax

What is Section 194S of the Income Tax Act?

Section 194S of the Income Tax Act requires a 1% tax deducted at source (TDS) on payment for the transfer of a virtual digital asset in India, effective from July 2022. Its purpose is to create a transaction trail for crypto transfers. For example, when you sell crypto above the applicable threshold, 1% of the consideration is withheld and reported against your PAN. The TDS is not an extra tax but a credit adjustable against your final liability. This is general information, not tax advice; consult a professional for your situation.

This is general information, not tax advice. Tax rules change and depend on your individual circumstances — verify the current rules or consult a qualified tax professional before acting.