Those investing money in various virtual digital assets, including cryptocurrencies, have got relief from the tax department. The Central Board of Direct Taxes, CBDT, has exempted taxpayers from penal interest on digital virtual assets, including cryptocurrency.
Case Related To This Rule
Now, TDS is deducted from the transfer of virtual digital currency to any resident Indian citizen. The TDS rule has come into effect from July 2022. The buyer has to provide information about the TDS deducted from Form 26QE. Form 26QE is the challan-cum-statement form of TDS. There is a penalty provision for not doing this within the stipulated time.
Penalty Imposed Even After Delay In Form
The relief given by the Tax Department to the taxpayers is related to this. This relief has been given because Form 26QE was not available on time. Due to the non-arrival of the forms on time, there was a delay in providing information to the taxpayers. However, even after this, the penalty was imposed on the taxpayers.
Tax Department Fixed The Mistake
The tax department has rectified this error and decided to remove penal interest. The Central Board of Direct Taxes issued a directive on March 7, 2024, and said it had been decided to remove the penalty imposed for not filing Form 26QE within the stipulated time.
What Do The Current Rules Say?
The current rule says that if virtual digital assets are transferred to a resident, TDS will be deducted 1 per cent. Regarding this, the taxpayer has to inform 26QI about the TDS deducted within the next 30 days after the last date of the month of the concerned transaction. Otherwise, the penalty will be imposed.
