Circular No. 13 of 2022
F. No. 370142/29/2022-TPL (Part-I)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(TPL Division)

New Delhi, dated 22nd June, 2022

Subject: Guidelines for removal of difficulties under sub-section (6) of section 194S of
the Income-tax Act, 1961

Finance Act 2022 inserted a new section 194S in the Income-tax Act, 1961 (hereinafter
referred to as “the Act”) with effect from 1st July 2022.
The new section mandates a person, who is responsible for paying to any resident any sum by
way of consideration for transfer of a virtual digital asset (VDA), to deduct an amount equal
to 1% of such sum as income tax thereon. 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.
This deduction is not required to be made in the following cases:-

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