The 60-second version
Section 194BD requires person transferring VDA for consideration to deduct 1% TDS — returning NRIs selling Bitcoin or USDT peer-to-peer must collect PAN, file Form 26Q, and reconcile with Section 194S exchange TDS.
194BD is P2P seller obligation — exchange sales stay under 194S
Section 194BD applies when you transfer VDA for consideration and you are not an exchange — 1% TDS deducted before handing crypto to buyer.
Returning NRIs selling Bitcoin, Ethereum, or USDT peer-to-peer need TAN and Form 26Q if sale volume crosses threshold.
Exchange lane: Section 194S guide when buyer pays via Indian exchange.
194BD matrix
| Transfer type | Section | Form |
|---|---|---|
| P2P seller | 194BD | 26Q |
| Exchange trade | 194S | 26Q |
| Gaming winnings | 194BCC | 26Q |
| Flat tax | 115BBH | ITR-2 |
Seller flow
TAN
If regular seller.
Buyer PAN
Collect before transfer.
Deduct 1%
Before crypto handoff.
File 26Q
Quarterly.
ITR-2
Declare gain + TDS credit.
Flow
194BD kit
- TAN.
- Buyer PAN.
- Wallet txn hash.
- 26Q.
- 26AS match.
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115BBH flat tax
VDA income taxed at 30% flat under Section 115BBH — TDS credit offsets final liability; no loss set-off against other income.
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vs 194S?
194S covers exchange-facilitated transfer; 194BD covers person-to-person transfer.
vs 194BA?
194BA covers winnings from online games; 194BD covers VDA peer sale.
Rate?
1% TDS on consideration paid for VDA transfer under 194BD.
RNOR seller?
Indian-source VDA transfer taxable for resident and RNOR seller.
Foreign wallet?
Foreign P2P platform may not deduct 194BD — declare income and pay advance tax.
Schedule FA?
Foreign crypto wallet may need Schedule FA disclosure if held abroad.
Your tax year is already running.
RNOR status, exit timing, and DTAA benefits all depend on decisions you make before you land. Don't guess.