No TDS on Crypto and Virtual Digital Assets in these cases

Virtual digital assets (VDAs) and cryptocurrencies would be taxed according to a circular released by the tax department. Since the first of July, TDS's revised regulations for VDA and crypto have been in effect. If you buy a virtual digital asset (VDA) from a resident Indian, you must deduct 1% of the amount you pay from the amount you pay the seller (resident Indian) (TDS).

Regardless of when the amount is credited or when it is paid to the resident individual, the tax must be deducted. The Central Board of Direct Taxes (CBDT) has said that the tax will only be deducted if the amount paid exceeds the set maximum.

The TDS, on the other hand, will only be applied if the transaction value exceeds a predetermined threshold. A single transaction or a series of transactions can exceed the limit. So, when does TDS not apply to the purchase and sale of VDAs and cryptocurrencies?

Income tax laws state that the TDS on bitcoin, VDA isn't relevant when an individual pays less than Rs 50,000 throughout the financial year, or when an individual pays less than Rs 10,000 when no "designated person" is paying more than that.

When it comes to the Income Tax Act, who is considered a "specified person"?

"Specified Person" is defined in Section 194S of the Income Tax Act, 1961.

a) One who has no income from "profits and gains of company or profession," whether an individual or Hindu Undivided Family (HUF) .

b) A person or a Hindu Undivided Family (HUF) who has income under the heading "profits and gains of business or profession" is eligible.

During a given financial year, he or she does not make more than Rs 1 crore in sales/gross receipts/turnover from the businesses he or she is involved in.