Section 194S → Section 227
TDS on payment on transfer of virtual digital asset (Crypto)
Quick Answer
Section 194S of the Income Tax Act, 1961 (TDS on payment on transfer of virtual digital asset (Crypto)) corresponds to Section 227 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 194S
Provision Summary
1% TDS on the transfer of Crypto/NFTs to track transactions.
Sec 227
Provision Summary
Retained. Compulsory for crypto exchanges and P2P buyers.
Key Changes & Highlights
- TDS must be deducted even if the consideration is in kind (exchange of one crypto for another).
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Frequently Asked Questions
What does Section 194S of the Income Tax Act 1961 deal with?
Section 194S (TDS on payment on transfer of virtual digital asset (Crypto)) 1% TDS on the transfer of Crypto/NFTs to track transactions.
What is the new section number for Section 194S under the Direct Tax Code 2025?
Section 194S of the ITA 1961 maps to Section 227 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 194S under the new tax code?
Section 194S is marked as "Retained" with status "Active". Impact: Critical - The primary data source for taxing the VDA ecosystem.
What are the key changes to Section 194S under DTC 2025?
TDS must be deducted even if the consideration is in kind (exchange of one crypto for another).
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
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