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December 14, 2022

Govt gets RS 60.46cr TDS from deals in Virtual Digital Assets

by CA Shivam Jaiswal in Income Tax

Govt gets RS 60.46cr TDS from deals in Virtual Digital Assets

The government reported on Tuesday that since the implementation of TDS rules in July, it has received a total of Rs60.46 crore in tax from entities for transactions in virtual digital assets (VDAs), including crypto currencies.

The government from April 1 , implemented a 30 per cent income tax plus surcharge and cess on transfer of crypto assets, like Bitcoin, Ethereum, Tether and Dogecoin. The government had also introduced 1 per cent tax deducted at source (TDS) under section 194S of I-T Act on payments over ₹10,000 towards virtual digital currencies from July 1. .These taxes were introduced in the union budget for 2022- 23.

“Post insertion of Section 194S in the Income-tax Act, 1961 through Finance Act, 2022, a total of 318 direct tax challans having TDS code 194S have been received having total amount of Rs 60.46 crore,” Pankaj Chaudhary said in a written reply to a question in the Rajya Sabha

As per news and media report Minister of State for Finance Pankaj Chaudhary said CBDT conducts outreach/ awareness programmes for deductors/taxpayers and also takes appropriate action, including search & seizure operations, surveys, enquiries etc, as required.

Under the Income-tax Act, 1961, Section 194S has been inserted through the Finance Act, 2022 for deduction of tax at source in respect of transfer of VDAs which is to be complied with by any person engaged in transactions related to VDAs.

The minister further said currently, crypto assets are unregulated in India and the government does not register foreign crypto exchanges.

“Crypto assets are by definition borderless and require international collaboration to prevent regulatory arbitrage,” he said.

The crypto currency sector had expressed worries about the tax’s introduction, arguing that it would cause investments to transfer to overseas exchanges and platforms.

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