CBDT vide Notification No. 67/2022 dated 21.06.2022 in G.S.R. 463(E) through Income-tax (19th Amendment) Rules, 2022 notified furnishing of challan-cum-statement in Form No. 26QE and TDS certificates in Form No. 16E in case of TDS on Virtual Digital Assets (VDA) or crypto-currency under section 194S of the Income-tax Act, 1961 ('Act').
These amendment rules have amended Rule 30, Rule 31 and Rule 31A of the Income-tax Rules, 1962 related to furnishing of TDS statements and issue of TDS certificates to the deductees respectively.
Finance Act, 2022 has provided to levy income tax on virtual digital asset transactions and thus in order to capture the details of the transactions, section 194S is inserted into the Act to provide for deduction of tax on the transfer of virtual digital asset.
In order to widen the tax base from the transactions so carried out in relation to these VDA assets, section 194S is inserted in the Act to provide for deduction of tax on payment for transfer of virtual digital asset to a resident at the rate of 1% of such sum. However, in case the payment for such transfer is–
(i) wholly in kind or in exchange of another virtual digital asset where there is no part in cash; or
(ii) partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of such transfer, the person before making the payment shall ensure that the tax has been paid in respect of such consideration.
In case of specified persons, the provisions of section 203A (requirement to obtain TAN) and section 206AB (higher rate of TDS in case of non-filer of return of income) will not be applicable.
Further, no tax is to be deducted in case the payer is the specified person and the value or the aggregate of such value of consideration to a resident is less than Rs. 50,000 during the financial year. In any other case, the said limit is Rs. 10,000 during the financial year.
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CBDT Issues Guidelines for TDS on Virtual Digital Asset under section 194S
CBDT Issues further Guidelines for TDS on Virtual Digital Asset under section 194S
CBDT Notifies Form 26QE and Form 16E for TDS under section 194S on Virtual Digital Assets
The new rule provides for the due date for payment of TDS under section 194S within 30 days from the end of the month in which tax is deducted in Form No. 26QE. The tax is required to be deposited online electronically. Form No. 26QE is an online challan-cum-statement of tax deducted under section 194S.
Further, the deductor shall issue the TDS certificate to the deductee in Form 16E within 15 days from the due date of furnishing the challan-cum-statement in Form No. 26QE after the same is downloaded from the income-tax portal.
Amendment 1: Rule 30(2D) - Time Limit or Due Date to deposit the TDS in prescribed Challan
A new sub-rule (2D) in Rule 30 is inserted with effect from 1st July, 2022 to provide for payment of TDS under section 194S on the transfer of VDAs to the credit of the Central Government within a period of 30 days from the end of the month in which tax is deducted.
The TDS under section 194S shall be paid by Challan-cum-statement in Form No. 26QE.
Hence, tax deducted under section 194S in the month of July 2022 shall be required to be deposited by 30th August, 2022.
A new sub-rule (6D) is inserted in Rule 30 to provide for online or electronic filing of Form No. 26QE. Hence, tax is required to be deposited in online mode only.
It should be noted that Form No. 26QE is required to be furnished with PAN of the deductor. No TAN is required to be obtained if the deductor does not have so. However, the statement of TDS under section 194R and under section 194S can also be furnished in Form No. 26Q in case the deductor has TAN and is willing to furnish the statement in Form No. 26Q instead of Form No. 26QE. This notification has also amended Form No. 26Q to include section codes for -
● Section 194R (Code is 94R),
● First proviso to section 194R for the benefits or perquisites provided in kind (code is 94R-P),
● Section 194S (Code is 94S),
● First proviso to section 194S where the payment is made in kind or in case of an exchange of VDAs (code is 94S-P),
Amendment 2: Rule 31(3D) - Time Limit or Due Date to furnish TDS Certificate in prescribed Form
A new sub-rule 3(D) is inserted in Rule 31 to provide that every deductor who has deducted tax in accordance with the provisions of section 194S of the Act shall furnish the TDS certificate in Form 16E within fifteen days from the due date of furnishing the challan-cum-statement in Form No. 26QE after generating and downloading the same from the designated web portal.
Hence, the TDS certificates in Form No. 16E in respect of tax deducted under section 194S in the month of July 2022 shall be required to be furnished to the dedcutees by 15th September 2022.
Amendment 3: Rule 31A Amended-Furnishing of statement of TDS under section 200(3)
Rule 31A prescribes rules for furnishing the statement of TDS under section 200(3) of the Act. Section 200(3) casts an obligation on the deductors to furnish a statement of TDS in the prescribed form within the specified time limit after paying the tax deducted to the credit of the Central Government.
Sub-rule (4) of Rule 31A is amended to include the furnishing of particulars in respect of deduction of tax -
● under section 194B of the Act which relates to winnings from lottery or crossword puzzles,
● under section 194R of the Act relating to deduction of tax on benefits or perquisites in kind, and
● under section 194S of the Act relating to deduction of tax under section 194S
Further, a new sub-rule (4D) is inserted in Rule 31A provides the due date for electronically furnishing the challan-cum-statement in Form No. 26QE. It prescribes that the challan-cum-statement in Form No. 26QE shall be required to be furnished electronically within thirty days from the end of the month in which the deduction is made.
Amendment 4: Amendment in TDS forms and TDS certificate in Form No. 16E and Form No. 26QE inserted
The notification has also inserted new Form No. 16E and Form No. 26QE in Appendix II of the Rules with effect from 01.07.2022. Further, Form No. 26Q is also amended to include section codes for TDS under section 194R and section 194S.
Further, the 19th amendment rules have also amended
● Form 26QB (challan-cum-statement for TDS under section 194-IA in case of transfer of immovable properties) due to non-applicability of the provisions of section 206AB of the Act on deduction of tax under section 194-IA,
● Form 26QC (challan-cum-statement for TDS under section 194-IB in case of payment of rent by individuals) due to non-applicability of the provisions of section 206AB of the Act on deduction of tax under section 194-IB,
● Form 26QD (challan-cum-statement for TDS under section 194M in case of certain payments by individuals) due to non-applicability of the provisions of section 206AB of the Act for deduction of tax under section 194M.
The due date to furnish challan-cum-statement in Form No. 26QE and TDS certificates in Form No. 16E in respect of TDS under section 194S on payment of consideration for transfer of VDAs is summarized below-
Read the full text of CBDT Notification No. 67/2022 dated 21.06.2022 on TDS challan-cum-statement in Form No. 26QE and TDS Certificate in Form No. 16E for TDS under section 194S
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 21st June, 2022
INCOME-TAX
G.S.R. 463(E).– In exercise of the powers conferred by section 295 read with sections 194B, 194-IA, 194R, 194S and section 206AB of the Income-tax Act, 1961, the Central Board of Direct Taxes, hereby, makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. Short title and commencement.– (1) These rules may be called the Income-tax (19th Amendment) Rules, 2022.
(2) Save as otherwise provided in these rules, they shall come into force from the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules),
(a) in rule 30, with effect from the 1st July, 2022–
(i) after sub-rule (2C), the following sub-rule shall be inserted, namely:–
“(2D) Notwithstanding anything contained in sub-rule (1) or sub-rule (2), any sum deducted under section 194S by a specified person referred to in that section shall be paid to the credit of the Central Government within a period of thirty days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QE.”;
(ii) after sub-rule (6C), the following sub-rule shall be inserted, namely:––
“(6D) Where tax deducted is to be deposited accompanied by a challan-cum-statement in Form No.26QE, the amount of tax so deducted shall be deposited to the credit of the Central Government by remitting it electronically within the time specified in sub-rule (2D) into the Reserve Bank of India or the State Bank of India or any authorised bank.”;
(b) in rule 31, after sub-rule (3C), the following sub-rule shall be inserted with effect from the 1st July, 2022, namely:–
“(3D) Notwithstanding anything contained in sub-rule (1) or sub-rule (2) or sub-rule (3), every person, being a specified person referred to in section 194S and responsible for deduction of tax under that section shall furnish the certificate of deduction of tax at source in Form No.16E to the payee within fifteen days from the due date for furnishing the challan-cum-statement in Form No.26QE under rule 31A after generating and downloading the same from the web portal specified by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or the person authorised by him.”;
(c) in rule 31A, with effect from the 1 st day of July, 2022–
(i) in sub-rule (4), after clause (xvi), the following clause shall be inserted, namely:––
“(xvii) furnish particulars of amount deposited being prerequisite for releasing–
(a) winnings in terms of proviso to section 194B;
(b) benefit or perquisite in terms of first proviso to sub-section (1) of section 194R; and
(c) consideration in terms of proviso to sub-section (1) of section 194S along with the challan details such as BSR code of the bank, date of payment and challan serial number.”
(ii) after sub-rule (4C), the following sub-rule shall be inserted, namely,–
“(4D) Notwithstanding anything contained in sub-rule (1) or sub-rule (2) or sub-rule (3) of sub-rule (4), every specified person referred to in section 194S and responsible for deduction of tax under that section shall furnish to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or the person authorised by the Principal Director General of Income-tax (Systems) or the Director General of Incometax (Systems), a challan-cum-statement in Form No. 26QE electronically in accordance with the procedures, formats and standards specified under sub-rule (5) within thirty days from the end of the month in which the deduction is made.”.
3. In the principal rules, in Appendix II, after Form No. 16D, the following Form shall be inserted with effect from the 1st July, 2022, namely,–
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