Published 12 Aug 2026Effective 01 Oct 2026
At a glance
- •194S TDS rate: 1% → 0.1%
- •Effective from 1 October 2026
- •Thresholds unchanged: ₹50k / ₹10k per FY
- •115BBH flat 30% tax on gains continues
- •No loss set-off across VDAs continues
The Finance (No. 2) Act 2026 has reduced the TDS rate under Section 194S on transfer of Virtual Digital Assets (crypto, NFTs) from 1% to 0.1% with effect from 1 October 2026. The threshold remains ₹50,000 per FY for specified persons and ₹10,000 for others.
Exchanges acting as deductors must update their systems by 30 September. The rate cut applies only to transfers — VDA gifts and barter still attract regular income-tax treatment under Section 115BBH at 30%.
Losses from one VDA still cannot be set off against gains from another, and no cost of acquisition other than the purchase cost is deductible.
Who is impacted
Crypto tradersExchangesWeb3 startups