TMI BlogSection 194S : TDS on payment on transfer of virtual digital assetX X X X Extracts X X X X X X X X Extracts X X X X ..... uct tax at source. (b) In case of exchange of VDAs, both payer and payee may be liable to deduct tax at source as the transfer of VDA happens from both sides. (c) Where VDAs are transferred through an Exchange and payment to the seller is made directly by the exchange, In such cases, the exchange shall be liable to deduct tax at source. (d) Where VDAs are transferred through an Exchange but the payment is made to the seller through a broker. In such case, both the Exchange and the broker shall be liable to deduct tax at source. However, if there is a written agreement between the Exchange and the broker that the broker shall be deducting tax on such payment, then such broker alone may deduct the tax. (e) Where VDA being transferred is owned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he payer is a specified person ) or 5% (if the payer is not a specified person) as per the Section 206AB. [ Section 206AB(1) ] Specified Person means a person who has not furnished the return of income for the assessment year relevant to the previous year immediately preceding the financial year in which tax is required to be deducted, for which the time limit for furnishing the return of income under section 139(1) has expired and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in the said previous year. A specified person is not required to apply or obtain a Tax Deduction or Collection Account Number (TAN) for deducting tax under this provision . Thus, he shall be required t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case where the consideration for transfer of virtual digital asset is- (a) wholly in kind or in exchange of another virtual digital asset, where there is no part in cash; or (b) 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, 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. [ Proviso to Section 194S(1) ] Note:- Read with Guidelines for removal of difficulties under section 194S(6) of the Income-tax Act, 1961 [ Circular No. 13 of 2022 Dated 22/06/2022 ] Tax deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Any person other than specified person mention in (i) ₹ 10,000 The provisions of sections 203A and 206AB shall not apply to a specified person. Sec 194S(4) : TDS not to be deducted or collected under any other provisions Notwithstanding anything contained in section 194-O , in case of a transaction to which the provisions of the said section are also applicable along with the provisions of this section, then, tax shall be deducted under section 194S(1) . Due date of Remittance to government account [ Rule 30 ] Any sum deducted by a Specified Person shall be deposited to the credit of the Central Government by remitting it electronically into the Reserve Bank of India or the State Bank of India or any authorised bank within a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing quarterly statements to the DGIT (Systems) or the person authorised by the DGIT (Systems), namely:- Statement of deduction of tax under sections 193 to 196D (other than section 194P ) in- (i) Form No. 27Q in respect of the deductee who is a non-resident not being a company or a foreign company or resident but not ordinarily resident; and (ii) Form No. 26Q in respect of all other deductees. [ Rule 31A(1)(b) ] Due date Common for Exchange or Any other Person [ Rule 31A(2) ] Sl. No. Date of ending of quarter of F.Y. Due date 1. 30th June 31st July of the financial year 2. 30th September 31st October of the financial year 3. 31st December 31st January of the financial year 4. 31st March 31st May of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was deducted and end with the date when such tax was deposited to the government. Penalty and Prosecution Failure to comply with the provisions of deduction of tax at source under this provision may result in penalties and prosecution as per the following provisions: a) If a person fails to deduct tax at source, he shall be liable for payment of penalty under Section 271C; b) If a person fails to ensure payment of tax, he shall be liable for payment of penalty under Section 271C and prosecution under Section 276B; c) If a person deducts tax but fails to deposit the same to the credit of the Central Government, he shall be liable for the penalty under Section 221 and prosecution under Section 276B. However, no person shall be punishable und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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