The 1% TDS on a VDA Transfer

Section 194S of the Income-tax Act requires 1% of the consideration to be deducted at source when a virtual digital asset is transferred. It is withheld from the sale value rather than the gain, and it is an advance against your liability, not a second tax.

Annual thresholds decide when the deduction starts, and they differ for specified persons. From FY 2026-27 the provision sits in Section 393(1) of the Income Tax Act 2025 at the same 1%, and whether those thresholds carry across is being confirmed. The figures, the deductor rules and the credit route are on the India page.