The Statutory Brief

IT Act 1961 → 2025 / Section 194S

TDS

Section 194S → Section 393

TDS of 1% on transfer of virtual digital assets (crypto)

Section 194S of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025

New reference Section 393(1), Table Sl. No. 8(vi); exclusions 393(4), Sl. No. 12

Income-tax Act, 1961Section 194S

  • 1% on consideration for transfer of a virtual digital asset
  • Threshold ₹50,000 for specified individuals/HUFs, ₹10,000 for others
  • Exchange-level arrangements for deduction

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 393(1), Table Sl. No. 8(vi); exclusions 393(4), Sl. No. 12

  • Section 393(1), Table Sl. No. 8(vi): 1%
  • No-deduction limits in 393(4), Table Sl. No. 12: ₹50,000 for small individuals/HUFs, ₹10,000 for others
  • Specified individuals/HUFs need no TAN for this deduction (section 397(1)(c))

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Consolidated into section 393; rate and limits unchanged.

Practice notes

  • The CBDT mapping table prints this as 8(iv); the enacted Act places VDA at Table Sl. No. 8(vi) (8(iv) is business perquisites, old 194R).
  • Taxation of VDA gains themselves sits separately (old 115BBH).

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the TDS on crypto under the new Income Tax Act 2025?

1% on consideration for transfer of a virtual digital asset, under section 393(1), Table Sl. No. 8(vi), subject to the ₹50,000 / ₹10,000 limits in 393(4).

What is section 194S called in the new Income-tax Act, 2025?

Section 194S of the Income-tax Act, 1961 corresponds to Section 393(1), Table Sl. No. 8(vi); exclusions 393(4), Sl. No. 12 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 194S under the new Income Tax Act?

Consolidated into section 393; rate and limits unchanged.

Is section 194S still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 194S of the 1961 Act. Section 393(1), Table Sl. No. 8(vi); exclusions 393(4), Sl. No. 12 of the 2025 Act applies from tax year 2026-27.

Related sections

194Q→393TDS by buyers on purchase of goods above ₹50 lakh195→393TDS on interest and other sums paid to non-residents (residual provision)112→197Tax on long-term capital gains on other assets (property, unlisted shares, gold, etc.)