Explanation
Section 194S of IT Act 1961 (consolidated under §393 in IT Act 2025) applies to any person responsible for paying consideration on transfer of a Virtual Digital Asset. Key points: (1) Rate: 1% TDS on full consideration. (2) Threshold: ₹50,000 per year for specified persons (individuals/HUFs below audit threshold); ₹10,000 for others. (3) Exchange handles TDS for peer-to-peer trades through the exchange; buyer handles for direct P2P transfers. (4) Separate from §115BBH which taxes VDA income at 30% flat — §194S is the TDS mechanism, §115BBH is the tax rate. (5) No deduction of losses allowed — each transaction taxed independently. (6) VDA means any crypto, NFT, token as notified by the government. Verify on the income-tax portal before filing.