As stated in Budget 2022, purchases of virtual digital assets, cryptocurrencies and
NFTs will be subject to TDS. The buyer of the VDA is required to withhold tax
at the rate of one percent of the purchase price before making payment to the seller.
The new TDS rule will be applicable from 1st July 2022.
But TDS will not be applicable unless the transaction value exceeds the predetermined limit.
There are two ways to split the stated limit: into a single transaction and multiple transactions.
Hence, when will the TDS from VDA and sale and purchase of cryptocurrencies cease to exist?
When is TDS not applicable to VDAs or Cryptocurrencies?
As per Income Tax Rules, TDS will not be applicable on Cryptos and VDAs
if any of the following conditions are fulfilled:
a) The 'specified person' has not paid more than Rs. 50,000 during the financial year
b) none other than the 'specified person' listed above, has paid an amount exceeding Rs. 10,000.
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