Insertion of new section 194S

Section 60 of the Finance Act, 2022 deals with insertion of new section 194S. Insertion of new section 194S. 60. After section 194R of the Income-tax Act, the following section shall be inserted effect from the 1st day of July, 2022, namely:— '194S Payment on transfer of virtual digital asset.—(1) Any person responsible for paying to any resident any sum by way of considerati

Insertion of new section 194S.

60. After section 194R of the Income-tax Act, the following section shall be inserted effect from the 1st day of July, 2022, namely:—

'194S Payment on transfer of virtual digital asset.—(1) Any person responsible for paying to any resident any sum by way of consideration for transfer of a virtual digital asset, shall, at the time of credit of such sum to the account of the resident or at the time of payment of such sum by any mode, whichever is earlier, deduct an amount equal to one per cent. of such sum as income-tax thereon:

Provided that in a case where the consideration for transfer of virtual digital asset is—

(a)		wholly in kind or in exchange of another virtual digital asset, where there is no part in cash; or
(b)		partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of such transfer,

the person responsible for paying such consideration shall, before releasing the consideration, ensure that tax required to be deducted has been paid in respect of such consideration for the transfer of virtual digital asset.

(2) The provisions of sections 203A and 206AB shall not apply to a specified person.

(3) Notwithstanding anything contained in sub-section (1), no tax shall be deducted in a case, where—

(a)		the consideration is payable by a specified person and the value or aggregate value of such consideration does not exceed fifty thousand rupees during the financial year; or
(b)		the consideration is payable by any person other than a specified person and the value or aggregate value of such consideration does not exceed ten thousand rupees during the financial year.

(4) Notwithstanding anything contained in section 194-O, in case of a transaction to which the provisions of the said section are also applicable along with the provisions of this section, then, tax shall be deducted under sub-section (1).

(5) Where any sum referred to in sub-section (1) is credited to any account, whether called "Suspense Account" or by any other name, in the books of account of the person liable to pay such sum, such credit of the sum shall be deemed to be the credit of such sum to the account of the payee and the provisions of this section shall apply accordingly.

(6) If any difficulty arises in giving effect to the provisions of this section, the Board may, with the prior approval of the Central Government, issue guidelines for the purposes of removing the difficulty.

(7) Every guideline issued by the Board under sub-section (6) shall be laid before each House of Parliament, and shall be binding on the income-tax authorities and on the person responsible for paying the consideration on transfer of such virtual digital asset.

Explanation.—For the purposes of this section "specified person" means a person,—

(a)		being an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business carried on by him or profession exercised by him does not exceed one crore rupees in case of business or fifty lakh rupees in case of profession, during the financial year immediately preceding the financial year in which such virtual digital asset is transferred;
(b)		being an individual or a Hindu undivided family, not having any income under the head "Profits and gains of business or profession".'.

Section 60, The Finance Act, 2022 (Act 6 of 2022).