India: Guidance on tax withholding on transfers of virtual digital assets other than through an exchange
Rules for withholding tax at source for consideration paid for transfer of a virtual digital asset
Withholding tax at source for consideration paid for transfer of a virtual digital asset
The Central Board of Direct Taxes (CBDT) issued guidance regarding the rules for withholding (deducting) tax at source for consideration paid for the transfer of a virtual digital asset other than through an exchange.
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.
The CBDT previously issued guidance for cases where the transfer of a virtual digital asset takes place on or through an exchange. Read TaxNewsFlash
Read a July 2022 report [PDF 234 KB] prepared by the KPMG member firm in India
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.