What is TDS on Cryptocurrency transactions (VDA)?
Nexa Consultancy | Startup & Finance Glossary
A 1% Tax Deducted at Source (TDS) is applicable under Section 194S of the Income Tax Act on the payment for the transfer of Virtual Digital Assets (VDAs), like cryptocurrency, if the aggregate payment exceeds a certain threshold in a year.
Startup Example: A Web3 startup in India pays ₹1 Lakh in crypto to a freelance developer for their services. The startup is required to deduct 1% TDS (i.e., ₹1,000) before making the payment.
Navigating VDA taxation is a part of our specialized tax compliance.