CBDT issues circular for TDS on Virtual Digital Asset transactions outside Exchange

The Central Board of Direct Taxes (CBDT) issued a new circular for TDS on Virtual Digital Assets on June 28, 2022. According to the circular, now, the buyer will have to deduct TDS on the trade of virtual digital assets outside the exchange. Zee Business report.

According to the report, CBDT has issued Circular No. 14/2022 dt. Jun 28, 2022, for TDS under Section 194S on transactions other than those taking place on or through an Exchange.

Earlier, the CBDT had issued another circular on June 22. The last week's circular had put the responsibility of deducting TDS only on exchanges. "CBDT issues Circular No. 13/2022 dt 22.06.22 containing guidelines to remove difficulties wrt Section 194S, which comes into effect from 01.07.22. Section 194S mandates tax deduction @ 1% on transfer of Virtual Digital Asset by payer," the income tax department tweeted.

CBDT issues Circular No. 13/2022 dt 22.06.22 containing guidelines to remove difficulties wrt Section 194S, which comes into effect from 01.07.22. Section 194S mandates tax deduction @ 1% on transfer of Virtual Digital Asset by payer.
It is available on:https://t.co/NMNcgKzkOU

— Income Tax India (@IncomeTaxIndia) June 22, 2022

But, according to the new circular, now after deducting GST, the buyer will have to pay TDS. Apart from that, during VDA to another VDA transaction, buyers and sellers both will have to pay TDS.