Section 393(1) of the Income Tax Act 2025

The Income Tax Act 2025 replaced the Income-tax Act, 1961 from 1 April 2026. The 1% deduction at source on a transfer of a virtual digital asset moved with it, and from FY 2026-27 it sits in Section 393(1) at the same rate.

Key highlights

What moved, what stayed, and what is still open.

Deducted from the consideration, unchanged

Section 393(1)

FY 2026-27

First year the new numbering governs

From 1 April 2026

Open

Whether the old thresholds carry across

Not stated on this page

What Actually Changed on 1 April 2026

Less than the rewrite suggests. Budget 2026 left the 30% charge, the 4% health and education cess and the 1% deduction at source alone, so the arithmetic on a trade is the same before and after the switch. What changed is the address: the deduction that filers knew as Section 194S is now Section 393(1).

For a return covering FY 2025-26 the old numbering is still the correct one to cite, because the 1961 Act governed that year. Both numbers will appear in commentary for a while, and a reference to one is not a mistake as long as it matches the year it describes.

One Figure This Page Will Not State

Under Section 194S the deduction began above annual thresholds, and they differed for specified persons. Whether those same figures carry into Section 393(1) is not something the statutory text settles today, so this page leaves the number blank rather than borrowing one from commentary.

The practical answer for most filers is that it makes no difference in an exchange trade. The platform deducts and deposits the 1% regardless, and what you need at filing time is the credit rather than the threshold analysis.

The Reporting That Arrived With It

The substantive change sits next door. Section 509(1) of the same Act puts crypto exchanges and comparable platforms among the prescribed reporting entities that must file user level transaction statements, and Section 446 attaches a penalty where such a statement is late or carries inaccurate particulars.

Your trades therefore reach the department twice: once through your return, and once through the platform. The two agreeing is now worth more than it was.

Frequently Asked Questions

The questions this term raises most often.

No. The flat 30% on a VDA gain, the 4% cess on that tax and the 1% deduction at source all carried across unchanged. The section numbers moved; the arithmetic did not.

Section 194S. The 1961 Act governed FY 2025-26, so that return runs on the old numbering. Section 393(1) governs from FY 2026-27 onward.

Yes. Section 509(1) makes crypto exchanges and comparable platforms reporting entities that file user level statements of your transactions, beginning 1 April 2026, with a penalty on the platform under Section 446 where the statement is late or wrong.

This page states the law and what CryptoKar computes from your trade history. It is not tax advice. Judgment calls belong with a chartered accountant. Sections and dates here were read against the source on 21 August 2026.

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