Form 26QE is a document for reporting TDS on Virtual Digital Assets (like Cryptocurrency) transactions under Section 194-S.
It covers TDS on Virtual Digital Assets, its applicability, limits, rates, time of deduction, and the process of filing TDS under Section 194-S.
Background: TDS on VDA Transfer
The Budget 2022 introduced tax deduction at source (TDS) on virtual digital assets (VDA) provisions. This was enabled through an amendment in the Income Tax Act of 1961, adding a new section 194S for TDS on VDA transfer.
2. What is Section 194S?
2.1 Applicability: This applies to anyone who pays a resident seller of VDA. Section 194S is effective from 01st July 2022
NOTE: This section does not apply if the VDA seller is non-resident. Section 195 covers non-resident payments.
2.2 Threshold Limit
2.3 TDS Rate :1% on the payable or paid consideration.
2.4 Time of Deduction: TDS should be deducted at the earliest of these times:
2.5 Requirement of TAN: TAN isn't needed for TDS deduction under section 194S.
2.6 TDS Return
Form 26QE Explanation and Filing Process
3.1 Form 26QE is a document for reporting TDS transactions on Virtual Digital Assets (VDA) purchases u/s 194S.
3.2 Due Date: File Form 26QE within 30 days from the end of the month when the tax deduction occurred.
NOTE: For example, if Mr. Arjun bought VDA from Mr. Karna for Rs 60,000 on March 15, 2023, he needs to deduct TDS @ 1% on that date and file Form 26QE by April 30, 2023.
3.3 File Form 26QE athttps://www.incometax.gov.in/iec/foportal/
3.4 Form 26QE Filing Requirements