Govt clarifies rate of TDS on virtual digital assets continues to be 1%

The 1% TDS will be applicable from July 1, 2022

The government on Wednesday clarified that the TDS on virtual digital assets continues to be 1%.

The clarification from the Income Tax comes at a time when earlier in the day some media reports mentioned that the TDS rate for virtual digital assets has been dropped to 0.1% from 1% as announced earlier in the budget.

The 1% TDS will be applicable from July 1.

"Some media reports have come to the notice of CBDT claiming that the rate of TDS on Virtual Digital Assets(VDA) has been reduced to 0.1%. It is hereby clarified that there is no change in the rate of TDS on VDA, which continues to be 1%," read the official clarification.

"It is hereby clarified that there is no change in the rate of TDS on VDA, which continues to be 1%," the statement further added.

The Centre had set a 30% taxation on the gains from the cryptocurrency assets. The government will soon finalise a consultation paper on cryptocurrencies with inputs from various stakeholders and institutions, including the World Bank and the IMF, Economic Affairs Secretary Ajay Seth said last month.