Crypto buying and selling goes to be troublesome in India from subsequent month. The 1% TDS rule for cryptocurrency and digital digital belongings (VDAs) transactions will come into impact from the first of July 2022.
The Central Board of Direct Taxes (CBDT) just lately launched pointers explaining who will probably be liable for deducting TDS in several types of transactions.
As per the CBDT’s Circular No. 13 of 2022, the crypto purchaser must deduct the TDS within the case of peer-to-peer transactions. If the transaction takes place on or by the alternate, the alternate might deduct TDS.
“In certain cases where the transaction takes place on exchange but the payment to the seller is made through the broker, in that case, both exchange and broker are required to deduct TDS, however, based on the written agreement, broker only may deduct TDS on the seller,” Gopal Bohra, Partner, N.A. Shah Associates instructed FE Online.
He additional stated that the individual, whether or not purchaser or alternate or dealer, because the case could also be, who has deducted TDS whereas making fee to the vendor of VDA, must deposit the tax inside 30 days from the top of the month wherein tax is deducted.
“For example, tax deducted under section 194S in the month of July shall be deposited on or before 30th August,” Bohra stated.
The tax shall be deposited on-line in Form No. 26QE which is challan-cum-statement of tax deducted beneath part 194S. For this objective, TAN of the deductor shouldn’t be required. However, if the deductor has TAN, he can fill the shape in Form 26Q
Further, the deductor must problem the TDS certificates to the deductee in Form 16E inside 15 days from the due date of furnishing the challan-cum-statement in Form No. 26QE after the identical is downloaded from the income-tax portal.
Tax influence of TDS rule
Experts say that the 1% TDS rule won’t lead to any further tax outgo within the palms of the vendor as the identical will probably be adjusted towards his common annual tax legal responsibility.
There will probably be no TDS compliance burden on the customer if she or he buys crypto VDAs by an alternate.
“Though, there will be no additional tax outgo in the hands of the crypto seller due to 1% TDS since the same will be adjusted against his regular annual tax liability. However, this will definitely help the government to trace the crypto transactions and any tax leakage. Further, there will be no TDS compliance on the crypto buyer if he is buying through the exchange, because in such a case TDS will be deducted by the exchange and it will ease out his TDS compliance burden,” stated Bohra.
Source: www.financialexpress.com”