(Q1.)What is Form 26QE?
- TDS deducted on transaction in cash u/s 194S should be deposited to the central government account by Deductor/Buyer through filing online Form 26QE (challan-cum-statement) at e-filing portal.
(Q2.)Who will be responsible to file form 26QE?
- Deductor/Buyer will be responsible to file form 26QE.
(Q3.)What is Section 194S?
- Any specified person responsible for paying to any resident any sum by way of consideration for transfer of a virtual digital asset, shall, at the time of credit of such sum to the account of the resident or at the time of payment of such sum by any mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax thereon:
Provided that in a case where the consideration for transfer of virtual digital asset is —
(a) Wholly in kind or in exchange of another virtual digital asset, where there is no part in cash; or
(b) Partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of such transfer,
the specified person responsible for paying such consideration shall, before releasing the consideration, ensure that tax required to be deducted has been paid in respect of such consideration for the transfer of virtual digital asset. (Q4.)What is the meaning of Specified Person u/s 194S?
- "Specified Person" means a person, being an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business carried on by him or profession exercised by him does not exceed one crore rupees in case of business or fifty lakh rupees in case of profession, during the financial year immediately preceding the financial year in which such virtual digital asset is transferred.
Being an individual or a Hindu undivided family, not having any income under the head "Profits and gains of business or profession". Thus, Deductor Category can only be Individual or HUF, but Deductee Category can be anyone. (Q5.)What is the meaning of Virtual digital asset?
- Virtual assets is a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purpose.
Any information or code or number or token (not being Indian currency or foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme; and can be transferred, stored or traded electronically;
(b) a non"fungible token or any other token of similar nature, by whatever name called.
(c) any other digital asset, as the Central Government may, by notification in the Official Gazette specify: (Q6.)How to deposit tax deducted on transaction in kind? - Tax on Transaction in kind should be deposited to the central government account by Deductee/Seller through Challan – ITNS 280 under minor head code 100 (advance tax) through any of the authorized bank.
Note:
- Deductor/Buyer will file Form 26QE online at e-filing portal and provide these challan details as received from Deductee/Seller In this case.
- It is not as a challan-cum-statement. It will be as a statement and contains the information about the transaction and the TDS payment information as paid by Deductee/Seller. These Original statements (for Transaction in kind) will be processed as and when received by CPC-TDS.
(Q7.)How to deposit tax deducted on Transaction in Cash?
- TDS deducted on transaction in cash should be deposited to the central government account by Deductor/Buyer through filing online Form 26QE (challan-cum-statement) at e-filing Portal.
Note: 26QE filing will be considered valid only on receipt of a challan where minor head code is 800 for the relevant acknowledgement number. (Q8.)What are the conditions to deposit challan for proviso of Section 194S (i.e., Section Code 194SP)?
- The conditions to deposit challan for proviso of Section 194S (i.e., Section Code 194SP) are:
1. Challan to be used for paying tax by the Deductee/Seller must be ITNS 280 having minor head 100 (Advance Tax).
2. Challan should belong to the same quarter in which the transaction has happened and date of deposit of the challan should be on or before the date of transaction.
3. CPC-TDS will match the challan during processing of the Form 26QE. It will be a completely exact match. Following credentials of the challan will be matched to validate it.
a) PAN
b) CIN details
c) Amount
d) Minor Head
e) Date of deposit of the challan. (Q9.)How to set off demand raised against 26QE?
- In case of demand, Deductor/Buyer can pay challan under minor head - 800 through demand payment link available at e-filing site to set-off demand generated on acknowledgement number.
- Note: Demand can be set-off by Deductor/Buyer through filing correction statement by using Deductee/Seller challan ITNS-280 (minor head-100) or through Deductor/Buyer challan (minor-head 800) using demand payment link available at e-filing www.incometax.gov.in
(Q10.)Under which part of 26AS/Annual Tax Statement transaction details will reflect in case of transaction in kind?
- In case where challans paid by Deductee/Seller under ITNS-280, minor head-100 added in 26QE statement, TDS Credit entry for transaction in kind will be shown in annual tax statement i.e., form 26AS with tax deducted/deposited amount as Rs. 0.00 in Part-V of Deductee/Seller and Part-IX of Deductor/Buyer).
(Q11.)Under which part of 26AS/Annual Tax Statement transaction details will reflect in case of transaction in cash? - Transaction details will reflect in form 26AS/Annual Tax Statement as follows:
- In case of Deductee/Seller, transaction details will be updated under Part IV of form 26AS/Annual Tax Statement.
- In case of Deductor/Buyer, transaction details will update under Part VIII of form 26AS/Annual Tax Statement.
(Q12.)Which TDS certificate will generate for form 26QE? - Form 16-E will be the TDS certificate for form 26QE.
Note: Form-16E / Provisional Form-16E will not be generated in case of "transaction in kind" whether challan paid by Deductee/Seller or Deductor/Buyer. (Q13.)What is the due date of filing Form 26QE (In case of transaction in cash)? - Within thirty days from the end of the month in which the deduction is made. For e.g., date of deduction of tax is 01-July-2022 then due date of filing will be 30-August-2022.
Note: In case of transaction in kind: Within thirty days from the end of the month in which transaction took place i.e., "date of transfer of virtual digital asset (VDA)". For e.g.: "date of transfer of virtual digital asset (VDA)" is 01-July-2022 then due date of filing will be 30-August-2022. (Q14.)Is it possible to file 26QE challan-cum-statement (in case of transaction in cash) if PAN of Deductee/Seller is not available or Invalid PAN of Deductee/Seller? - Yes, it is possible to file 26QE challan-cum-statement (in case of transaction in cash) if PAN of Deductee/Seller is not available or invalid.
Note: Due to Invalid PAN of Deductee/Seller, as per Section-206AA, higher rate @ 20% will be charged on Amount/Paid Credited. (Q15.)Is it possible to file 26QE (in case of transaction in kind) if PAN of Deductee/Seller is not available or invalid? - In case of transaction in kind, PAN of Deductee/Seller can never be invalid because TDS will be deposited by the Deductee/Seller through Challan ITNS: 280 (with Minor Head-100) and same will be used for transaction in kind statement.
(Q16.)Is it possible to tag multiple Deductee/Seller challans (with Minor Head-100) in 26QE original statement? - Yes, Deductor/Buyer can tag multiple Deductee/Seller challans (with minor Head-100) in 26QE original statement.
(Q17.)Is it possible to use Deductee/Seller challan 280 (with Minor Head-100) in 26QE (challan-cum-statement) as well as in 26Q statement? - In case of transaction in kind, Dedutee/Seller challans (with minor Head-100) can be tagged in 26Q statement as well as in 26QE challan-cum-statement.
Note: In case of original statement (transaction in kind), only Deductee/Seller challans (ITNS-280 with minor head-100) will be used and processed accordingly. In case of demand, System will also check whether any Deductor/Buyer challan on the relevant Ack. No. is available in the OLTAS. If it is available, then use it for demand consumption.
