The 60-second version
Section 194S requires 1% TDS when I pay resident seller for crypto/NFT transfer above threshold — applies on exchanges and P2P. I deduct, deposit challan 281, file 26Q.
Exchange may deduct 194S — P2P buyer deducts manually
Section 194S applies to transfer of virtual digital assets for consideration — 1% TDS on payment to resident seller above notified threshold.
Licensed exchanges often deduct on platform — P2P and OTC deals need buyer to deduct and deposit.
Seller without PAN triggers higher rate under Section 206AA — collect PAN before trade.
Goods lane: Section 194Q guide.
VDA TDS sections
| Section | Rate | Asset |
|---|---|---|
| 194S VDA | 1% | Crypto / NFT transfer |
| 194Q goods | 0.1% | Goods purchase |
| 194R benefit | 10% | Business perquisite |
| 115BBH income | 30% | Seller VDA gains tax |
| 206AB non-filer | Higher | If seller non-filer |
194S compliance sequence
Confirm role
Buyer vs exchange delegated deductor.
Collect PAN
Seller PAN before settlement.
Deduct 1%
On consideration above threshold.
Challan 281
Deposit by 7th next month.
26Q + 16A
Quarterly return and seller cert.
TDS flow
194S buyer kit
- TAN.
- Seller PAN.
- Trade log.
- Challan receipts.
- 26Q ACK.
Need help with Tax & Residency?
Share your blocker in one line. Our experts will reply with practical next steps.
Foreign exchange
Offshore crypto not in 194S — Indian VDA platform trades only.
Quick visual
Animated decision map
Community signal
What to watch in real discussions
Search community threads for the exact phrase, then treat repeated complaints as risk signals rather than official advice.
Open nofollow community search ->Interactive checkpoint
Turn this guide into a decision file
0 of 4 checked
WazirX / CoinDCX?
Exchange deducts — verify 26AS line.
P2P USDT?
Buyer deducts if resident seller — document trade.
NFT art?
VDA definition includes notified NFTs — check CBDT list.
Loss trades?
TDS on consideration — not net of loss.
NRI seller?
Section 195 may apply — not 194S.
Threshold?
Verify current FY notification — cumulative limit applies.
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.