Income Tax Department Rectifies Gaffe, "Restores" 1% TDS On Virtual Assets After "Reduction"

In a confusion of sorts, the income tax department portal on Wednesday updated its document on tax deductible at source (TDS), reiterating that TDS on virtual digital assets remains at 1 per cent, as stated in the Union Budget for 2022-23, after it had earlier mentioned that the rate had been dropped to 0.1 per cent.

There was a flutter after the department's website earlier mentioned that the TDS rate for virtual digital assets has been brought down to 0.1 per cent from the 1 per cent TDS on such assets announced in the Union Budget. 

However, after the change was noticed by a cross section of people, the website updated the document rectifying the error.

Several crypto platforms and investors actively discussed the matter on social media.

The website had also added that no tax will be applicable, if the aggregate value does not exceed Rs 10,000 during the financial year and does not exceed Rs 50,000 during the financial year, which remains unchanged.

The 1 per cent TDS on virtual digital assets becomes applicable from July 1, 2022 onwards.