TDS section 194S

Actually due to 30% flat tax rate you will be required to pay more after adjusting TDS.

• Income from the transfer of virtual digital assets such as crypto and NFTs will be taxed at 30%.
• No deduction, except the cost of acquisition, will be allowed while reporting income from the transfer of digital assets.
• Loss from digital assets cannot be set-off against any other income.
• Income from VDA is taxed at special rates under Chapter XII of the Act. If a person’s total income comprises solely of income from VDA, then the benefit of unexhausted basic exemption limit is also not extended.

Section 194S TDS applies at 1% on the consideration paid on transfer of Virtual Digital Assets (VDA).

Key rules:
- Who deducts: The person making the payment to the seller must deduct TDS. If you sell crypto on an exchange, the exchange handles deduction. If you sell directly to a buyer (P2P), the buyer deducts.
- Threshold: For specified persons (individuals with business income over Rs. 1 crore or professional income over Rs. 50 lakh in prior year), the threshold is NIL ,  TDS applies on every transaction. For others, the threshold is Rs. 10,000 per financial year.
- Rate: 1% of the transfer consideration. If PAN is not furnished, the rate is 20%.
- Claim in ITR: The 1% deducted shows in your Form 26AS under Section 194S. Report this TDS in Schedule TDS in your ITR-2 to claim the credit.
- No adjustment for losses: Even if your VDA trade resulted in a loss, the 1% TDS is still deducted on the gross transfer consideration.

This [crypto and VDA tax guide for AY 2026-27](https://taxgarden.in/blog/crypto-vda-tax-india-ay-2026-27-schedule-vda-itr-guide) has the full Section 194S rules and how to reconcile your TDS credits.