• Notification Date: 14-12-2022
• Notification No: N/A

Government receives Rs 60.46 Crores of Tax from TDS on Virtual Digital Assets

On Tuesday, the Central Government announced that it has received an amount of Rs 60.46 crores in tax from entities for transactions in virtual digital assets (VDAs). The VDAs include cryptocurrencies, and other industries and it is the first time the government has received tax since the introduction of TDS provisions in July. 

The government has brought in a 30 percent income tax plus surcharge and cess on the transfer of crypto assets, such as Bitcoin, Ethereum, Tether and Dogecoin from April 1. To keep a tab on the money trail, the government has induced a 1 percent Tax Deducted at Source (TDS) under section 194S of the I-T Act on payments over Rs 10,000 towards virtual digital currencies from July 1. 

Minister of State for Finance, Pankaj Chaudhary said in a written reply to a question in the Rajya Sabha, that CBDT conducts outreach and awareness programmes for deductors and taxpayers. He also said that CBDT also takes appropriate action, including search & seizure operations, surveys, enquiries etc, as required. 

"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," Chaudhary said. 

Section 194S has been inserted by the government through the Finance Act, 2022. The new section has been introduced under the Income-tax Act, 1961 with the aim to reduce deduction of tax at source related to the transfer of VDAs, which is to be complied with by any person engaged in transactions related to VDAs. 

The minister further added that crypto assets are unregulated in India. The government does not register foreign crypto exchanges at present. Crypto assets are borderless and they require international collaboration to resist regulatory arbitrage.