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Finance Minister Nirmala Sitharaman included Section 194S in Budget 2022 to apply TDS on the transfer of cryptocurrencies and other VDAs (Virtual Digital Assets). Section 194S takes effect on July 1, 2022, rather than April 1, 2022. To track the transactions of VDAs and cryptocurrency, the government imposed a 1% TDS deduction on VDA transfers if the aggregate value reaches INR 10,000 during the financial year in question. Particulars Section 194S TDS Rate 1% Threshold Limit No tax is deducted if the consideration is payable by anyone other than a specified person to a resident and the value or aggregate value of such consideration does not exceed Rs 10,000/- during the fiscal year. Non Applicability If the consideration is payable by a specified person to a resident and the value or aggregate value of such consideration does not exceed Rs 50,000/- during the fiscal year, no tax i...

The Finance Act, 2021, has introduced many new provisions regarding deduction or collection of tax at source. One of them is: Section 194Q - TDS on purchase of goods Applicable from 01.07.2021 As per section 194Q(1), any person, being a buyer who is responsible for paying any sum to any resident (hereafter in this section referred to as the seller) for purchase of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year , shall, at the time of credit of such sum to the account of the seller or at the time of payment thereof by any mode, whichever is earlier, deduct an amount equal to 0.1% of such sum exceeding fifty lakh rupees as income-tax . **Rate increases to 5% in case of seller not having PAN, as per section 206AA of the Income Tax Act, 1961. Explanation – For the purposes of this sub-section, “buyer” means a person whose total sales, gross receipts or turnover from the business carried on by him exceed ten crore rupees during...

TDS Key Definitions:- 1.       The company or person that makes the payment after deducting TDS is called a deductor . 2.       The company or person receiving the payment is called the deductee. The concept of Tax Deducted at Source (TDS) was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor. It is the deductor’s responsibility to deduct TDS before making the payment and deposit the same with the government. TDS is deducted irrespective of the mode of payment –cash, cheque or credit–and is linked t...