This was introduced by Sitharaman when she tabled the Union Budget 2022-23 in Parliament on February 1. The TDS rule would come in force from July 1, Friday for transactions of more than Rs 10,000. However, the rules were not very clear until the Central Board of Direct Taxes (CBDT) issued clarifications on various issues as the Finance Act 2022 inserted a new section 194S in the Act from the coming month.Presented By
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According to CBDT, the tax deduction is required to be made at the time of credit of such sum to the account of the resident or at the time of payment, whichever is earlier. Here is how TDS would be paid in various scenarios:1. Peer-to-peer transactionIn a peer-to-peer transaction, a case where no broker or exchange is involved, the buyer is required to deduct tax under the given section. The tax so deducted is required to be deposited with the government under the relevant provisions of the income-tax Rules. It may be clarified that the TDS shall be on consideration for the transfer of VDA less GST.2. Transactions through a broker or exchangeWhen a VDA transfer is made through an exchange or a broker, tax may be deducted only by the exchange which is crediting or making payment to the seller. In a case, where the credit or payment between the exchange and the seller is done through a broker, who is not the seller, the onus of deducting tax is on both the exchange and the broker. However, the onus shall be on the broker, where there exists a written agreement between the two parties that the broker shall deduct tax under Section 194S.3. If VDA is ownedRead more on economictimes.indiatimes.com