TDS on Transfer of Virtual Digital Assets (VDA): Form No. 141 Schedule D

Introduction

The form in the VDA category needs to be filed because, where tax is required to be deducted at source on payment of consideration for transfer of a Virtual Digital Asset, the law does not stop at deduction alone; it also requires a prescribed statement / challan-cum-statement to be furnished to the Income-tax Department within the prescribed time. CBDT's official material describes Schedule D of Form No. 141 as the schedule for "transfer of Virtual Digital Assets (cryptos/NFTs)", so, in practical terms, this covers consideration paid for transfer of crypto-assets, cryptocurrencies, NFTs, and similar VDAs.

From 01.04.2026, this compliance moves into Form No. 141, Schedule D under section 393(1) [Table Sl. No. 8(vi)]. Before that date, the corresponding old-law challan-cum-statement route was Form 26QE under section 194S for specified persons. The transition is therefore not merely terminological; it is a shift from the old VDA challan-cum-statement form to the new unified Form No. 141 framework.

This article endeavours to cover all material aspects relating to Form No. 141 relevant to the present discussion. Since Form No. 141 also has other applications, those may be examined separately in another article, which may be accessed by clicking on the name appearing at the end. Should you have any queries after reading this article, you may contact us at the details mentioned at the end of the article.

What is covered in the VDA category

Schedule D is the VDA schedule in Form No. 141. CBDT's official guidance note and FAQ state that Schedule D applies to transactions involving transfer of virtual digital assets under section 393(1) [Table Sl. No. 8(vi)], and the guidance note specifically describes this category as "TDS on transfer of Virtual Digital Assets (cryptos/NFTs)".

Accordingly, the form needs to be filed where tax is required to be deducted at source on payment of consideration for transfer of a VDA. In plain terms, if a person is the buyer / payer / person responsible for paying consideration for transfer of a VDA and TDS is attracted on that transaction, the form-based compliance gets triggered.

Which form was required before 01.04.2026

For the period up to 31.03.2026, the corresponding old-law provision was section 194S. The Department's Tax Deductor page states that where tax is deducted under section 194S by specified persons, the amount must be paid to the credit of the Central Government within 30 days from the end of the month in which deduction is made and must be accompanied by a challan-cum-statement in Form No. 26QE. The same Department page also clarifies that in such cases the deductor can use PAN in place of TAN.

The corresponding certificate under the old form regime was Form 16E. This follows from the official Form No. 132 FAQ, which states that Form No. 132 has been created by merging earlier Forms 16B, 16C, 16D and 16E into a single certificate form.

So, for the old regime, the practical compliance chain was:

• Section 194S
• Form 26QE
• Form 16E
• Due date: 30 days from the end of the month of deduction.

Which form is required from 01.04.2026 onward

From 01.04.2026, the VDA category shifts to section 393(1) [Table Sl. No. 8(vi)] under the Income-tax Act, 2025. CBDT's official Form No. 141 FAQ states that Schedule D is the schedule applicable for transfer of virtual digital assets, and the guidance note states that Form No. 141 is the common replacement for earlier Forms 26QB, 26QC, 26QD and 26QE.

Under the new framework, the challan-cum-statement has to be filed electronically in Form No. 141, and the due date remains within 30 days from the end of the month in which deduction is made. CBDT's guidance note also describes Form No. 141 as a PAN-based challan-cum-statement, which means that this stream continues to be PAN-based rather than a regular TAN-based quarterly return stream.

The new certificate corresponding to Schedule D is Form No. 132. CBDT's Form No. 132 FAQ states that Form No. 132 is the TDS certificate for specified transaction-based deductions, including transfer of Virtual Digital Assets, and the Form No. 141 guidance note states that the certificate must be issued within 15 days from the due date of filing Form No. 141.

So, from 01.04.2026 onward, the practical compliance chain becomes:

• Section 393(1) [Table Sl. No. 8(vi)]
• Form No. 141 - Schedule D
• Form No. 132
• Due date: 30 days from the end of the month of deduction.

Direct comparison: before and after 01.04.2026

The clean comparison is:

• Up to 31.03.2026: Section 194S → Form 26QE → Form 16E.
  From 01.04.2026 onward: Section 393(1) [Table Sl. No. 8(vi)] → Form No. 141, Schedule D → Form No. 132.

Which date decides whether the old form or the new form applies

The transition is governed by the earlier of credit or payment. The Department's transition FAQ states that for challan-cum-TDS statement cases, where the event of credit or payment occurred on or before 31.03.2026, the old forms continue to apply, and this expressly includes Form 26QE for VDA. For transactions where the event of credit or payment occurs on or after 01.04.2026, the new Act/form framework applies.

Accordingly:

• credit/payment on or before 31.03.2026 → Form 26QE
• credit/payment on or after 01.04.2026 → Form No. 141, Schedule D.

When Schedule D of Form No. 141 is required

From 01.04.2026, Schedule D of Form No. 141 is required where:

• a person is responsible for paying consideration to a resident transferor for transfer of a VDA; and
• that person is required to deduct TDS under section 393(1) [Table Sl. No. 8(vi)].

CBDT's guidance note further clarifies that this includes even specified persons, namely broadly:

• individuals/HUFs with turnover below Rs 1 crore for business or Rs 50 lakh for profession in the preceding financial year; or
• individuals/HUFs not having income from business or profession.

So, in plain terms, Form No. 141, Schedule D is to be filed when you are the buyer / payer / person responsible for paying consideration for a VDA transfer and TDS is deductible on that transaction.

Important exception: exchange-related reporting

A separate compliance route exists for VDA exchanges. CBDT's official FAQ for Form No. 142 states that this form is a PAN-based quarterly form to be filed by an Exchange that facilitates VDA transactions and has agreed, in accordance with CBDT Circular No. 13/2022 dated 22.06.2022, to deposit tax on transfer of VDA as an alternative to tax otherwise required to be deducted by the buyer. The FAQ also expressly states that Form No. 142 is the form corresponding to the earlier Form 26QF.

Therefore, the practical distinction is:

• ordinary buyer / payer deducting TDS on VDA transfer → Form No. 141, Schedule D
• exchange filing exchange-level VDA statement under the special mechanism → Form No. 142.

To summarise, if the transaction is executed through the exchange and the exchange is obligated to deduct tax at source, the individual is not required to deduct TDS separately. Conversely, if the assessee undertakes transactions outside the exchange, the obligation to deduct TDS would apply. Additionally, if in any particular case the exchange directs the individual to deduct TDS independently, the individual would be required to do so. However, such instances are highly exceptional.

How this differs from normal exchange trading where the exchange deposits the tax

The VDA compliance differs materially between:

1. exchange-facilitated trading where the exchange has agreed to deposit/pay the tax, and
2. cases where the buyer/payer himself has to deduct TDS.

These are not merely two ways of paying the same tax; they involve different responsible persons, different forms, different filing frequency, and different post-filing compliances. Under the exchange route, the exchange becomes the reporting person under the special mechanism and files Form No. 142 quarterly. Under the buyer-deduction route, the buyer/payer becomes the deductor and files Form No. 141, Schedule D as a challan-cum-statement within 30 days from month-end.

So, in "normal trading" on a compliant exchange where the exchange has taken on this responsibility under the CBDT mechanism, the individual buyer does not separately file Form No. 141 for that same transaction merely because he bought the VDA on that exchange route. The exchange's quarterly statement mechanism applies for that set of transactions. This is the natural implication of the official FAQ describing Form No. 142 as the alternative compliance route where the exchange deposits tax on behalf of buyers/brokers.

Form-wise comparison: exchange route versus buyer-deduction route

Exchange deducts / deposits tax

In this route, the relevant form is Form No. 142. The official FAQ states that it is a PAN-based quarterly form prescribed under the 2026 Rules for VDA exchanges that facilitate buying and selling of VDAs and have agreed to deposit tax on behalf of buyers or brokers. The due dates are quarterly:

• quarter ending 30 June → due by 31 July
• quarter ending 30 September → due by 31 October
• quarter ending 31 December → due by 31 January
• quarter ending 31 March → due by 31 May

Individual buyer/payer deducts TDS

In this route, the relevant form is Form No. 141, Schedule D. It is a PAN-based challan-cum-statement, not a quarterly return, and it must be filed within 30 days from the end of the month in which deduction is made.

So the first major difference is:

• Exchange route → quarterly Form No. 142
• Buyer deduction route → monthly / event-based Form No. 141, Schedule D within 30 days.

What details are reported in each form

Form No. 142 - exchange reporting

The Form No. 142 FAQ states that the exchange reports:

• exchange details
• buyer / broker details
• transaction details such as date of transaction, name of VDA, value of VDA bought, number of VDAs bought, and total consideration
• tax payment details including amount of tax deposited and challan particulars
• non-deduction / exemption information, including records of transactions exempt from TDS under section 400(2)

This shows that the exchange form is a quarterly reporting and reconciliation form covering all relevant VDA trades in the quarter, including non-deduction / exempt cases.

Form No. 141, Schedule D - buyer-side deduction

The Form No. 141 guidance note states that the deductor has to furnish:

• PAN details of deductor and deductee
• address, mobile number and email ID of both parties
• transaction-specific details for Schedule D, namely type of VDA, date of transfer, consideration value, and mode of transfer/payment. It also requires TDS rate, date of deduction, and tax amount.

So the buyer-side form is a transaction-based deduction statement focused on that particular deduction event, while the exchange form is a quarterly transaction-ledger / reporting statement at the exchange level.

What compliances apply when the individual has to deduct TDS

If the individual buyer / payer is the person who must deduct TDS on VDA transfer, the practical compliances are these.

(i) Deduct TDS under the VDA provision

The person responsible for paying consideration to the resident transferor must deduct tax at the prescribed rate under section 393(1) [Table Sl. No. 8(vi)]. The same Schedule D note also states that specified persons are covered.

(ii) File Form No. 141, Schedule D electronically

The challan-cum-statement must be filed electronically on the e-filing portal in Form No. 141 using Schedule D, and it must be furnished within 30 days from the end of the month in which deduction is made.

(iii) Deposit the tax along with the challan-cum-statement

The Form No. 141 process flow states that the deductor logs in using PAN, goes to e-Pay Tax, selects the relevant schedule, fills in the deductor/deductee and transaction details, makes the online TDS payment, submits the form, and downloads the challan-cum-statement.

(iv) Issue TDS certificate in Form No. 132

Once Form No. 141 is processed, the deductor can download Form No. 132 from TRACES and issue it to the deductee. The guidance note states that the certificate must be issued within 15 days from the due date of filing Form No. 141, and the Form No. 132 FAQ confirms that Form No. 132 covers VDA transactions as well.

(v) Handle defaults, if any

If Form No. 141 is processed with defaults, such as short payment, late payment interest, or late filing fee, the deductor is required to pay the default amount and, if necessary, file a correction statement through TRACES.

(vi) Deductee credit reflection

The Form No. 141 guidance note states that once Form No. 141 is processed, the TDS amount reflects in the deductee's Form No. 168 (AIS), and the deductee can use that credit while filing the income-tax return.

Whether the individual also has to file a regular quarterly TDS return

For this VDA buyer-side route, the Department's framework treats it as a challan-cum-statement compliance. The old and new transition materials show VDA TDS in this stream under Form 26QE earlier and Form No. 141 now, separately from regular quarterly TDS returns. The Department's Tax Deductor page also states for old section 194S by specified persons that no separate statement shall be filed apart from Form 26QE. On the same logic, the new route is the Schedule D challan-cum-statement route, not the ordinary TAN-based quarterly TDS return route.

By contrast, the exchange route has its own quarterly compliance in Form No. 142, and the FAQ itself makes clear that it is a separate exchange statement.

Old-versus-new form mapping

For completeness, the Department's transition FAQ states that for transactions where the event of credit or payment occurred on or before 31.03.2026, the old forms continue to apply, including Form 26QE for VDA. For transactions where the event occurred on or after 01.04.2026, the new Act applies and the common Form No. 141 is to be used for buyer-side challan-cum-statement cases.

So the buyer-side VDA route is:

• up to 31.03.2026 → Form 26QE
• from 01.04.2026 → Form No. 141, Schedule D.

And the exchange route is:

• earlier exchange quarterly statement → Form 26QF
• from 01.04.2026 → Form No. 142. The Form No. 142 FAQ expressly describes Form No. 142 as the form corresponding to earlier Form No. 26QF.

Important caution on threshold

There is one point where the recent official material is not perfectly uniform. The Form No. 141 FAQ threshold chart states that for transfer of VDA, "No monetary limit is prescribed." However, the detailed guidance note on Form No. 141 uses slightly different wording and says Schedule D applies where the consideration exceeds the monetary threshold prescribed under section 393(1) [Table Sl. No. 8(vi)].

Because of this inconsistency in the recent official explanatory material, the safer compliance reading is this: if TDS is otherwise deductible on the VDA transfer, the relevant form should be filed, rather than casually assuming non-applicability only on the basis of one summary line.

Bottom line

For VDA transactions, the form needs to be filed because the law requires not only deduction and deposit of tax, but also a prescribed statement to be furnished to the Department for the VDA transfer category. VDA here means virtual digital assets such as cryptos / NFTs.

Before 01.04.2026, the relevant challan-cum-statement route for specified-person VDA deduction was Form 26QE under section 194S, with certificate Form 16E. From 01.04.2026, the corresponding buyer-side filing shifts to Form No. 141, Schedule D under section 393(1) [Table Sl. No. 8(vi)], and the certificate becomes Form No. 132. The deciding factor for old versus new form is the earlier of credit or payment.

Where the transaction is under the special exchange mechanism, the reporting person is the exchange, and the relevant quarterly form is Form No. 142. Where that mechanism does not apply, the buyer/payer must deduct TDS, file Form No. 141, Schedule D within 30 days from month-end, deposit the tax through the e-filing / e-Pay Tax route, issue Form No. 132, and handle any correction/default process through TRACES if required.

The author can also be reached at varunmukeshgupta96@gmail.com