India: Guidance on tax withholding, transfers of virtual digital assets

Guidelines in a “question and answer” (Q&A) format

Guidelines in a “question and answer” (Q&A) format

The Central Board of Direct Taxes (CBDT) issued guidelines in a “question and answer” (Q&A) format regarding the rules for withholding (deducting) tax at source for consideration paid for the transfer of a virtual digital asset.

The Finance Act, 2022 introduced a requirement for tax withholding at source on the amount of consideration paid for the transfer of a virtual digital asset.

Accordingly, Section 194S was added to the Income-tax Act, 1961, requiring tax withholding at the rate of 1% on the consideration paid for transfer of a virtual digital asset, effective 1 July 2022.

Read a June 2022 report [PDF 313 KB] prepared by the KPMG member firm in India

 

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