If you bought crypto from another person in India on a P2P platform this year, the 1% tax you were meant to withhold no longer goes through Form 26QE. Since the Income-tax Act, 2025 took effect, the buyer deposits that TDS through Form 141, Schedule D, within 30 days from the end of the month of deduction, using a PAN rather than a TAN. The rate has not changed: 1% of the consideration, now under section 393(1), Table serial number 8(vi). What has changed is the paperwork, the section numbers and the forms your seller’s certificate comes on.
Key Takeaways
- Form 141 is one challan-cum-statement that replaces Forms 26QB, 26QC, 26QD and 26QE. Crypto and other virtual digital assets (VDAs) go in Schedule D.
- Old Section 194S is now section 393(1), Table serial number 8(vi), of the Income-tax Act, 2025. The rate is still 1%.
- No TDS is due below ₹50,000 a year for individuals and HUFs that meet the turnover or no-business-income conditions, or below ₹10,000 for other buyers.
- Deposit and file within 30 days from the end of the month you deducted. The late fee is ₹200 a day, capped at the TDS amount.
- Form 141 applies to transactions from tax year 2026-27. The seller’s TDS certificate is now Form 132, downloaded from TRACES.
What Is Form 141?
Form 141 is a single form for reporting and paying TDS on four kinds of one-off payments made by people who usually do not hold a TAN. According to the Income Tax Department’s FAQs, it is the challan-cum-statement for section 393(1), Table serial numbers 2(i), 3(i), 6(ii) and 8(vi), and it sits under Rules 218 and 219 of the Income-tax Rules, 2026. Those two rules replaced Rules 30 and 31A of the 1962 Rules.
Each payment type has its own schedule, and you fill only one schedule per form.
| Schedule | Payment | Section 393(1) table entry | Old form it replaces |
|---|---|---|---|
| A | Rent | Sl. No. 2(i) | 26QC |
| B | Purchase of immovable property | Sl. No. 3(i) | 26QB |
| C | Payments to resident contractors or professionals | Sl. No. 6(ii) | 26QD |
| D | Transfer of a virtual digital asset | Sl. No. 8(vi) | 26QE |
Source: Form 141 FAQs, Income Tax Department (data as of October 2026).
Section 194S Has a New Address
Under the 1961 Act, Section 194S told anyone paying a resident for a VDA to withhold 1%, at the earlier of crediting the payee or paying them. The 2025 Act folds most TDS provisions into one long table in section 393. The department’s text of section 393 lists the VDA entry at serial number 8(vi): “any person” paying consideration for transfer of a VDA deducts 1%.
The thresholds moved into a separate no-deduction list, section 393(4), serial number 12. Tax is not deducted where the year’s consideration stays within ₹50,000 for an individual or HUF that meets the turnover or income conditions, or within ₹10,000 for any other payer. Under the old law those conditions defined a “specified person”: an individual or HUF with business turnover up to ₹1 crore or professional receipts up to ₹50 lakh in the previous year, or with no business or professional income at all, as Section 194S’s explanation set out.
- Salaried buyer, no business income: the ₹50,000 annual threshold applies.
- Trader or firm with larger turnover: the ₹10,000 threshold applies.
- Paid in kind or with another token: the payer must make sure the tax has been paid before handing over the consideration, under Note 6 to the section 393 table.
One wrinkle trips people up. The Form 141 FAQs say Schedule D has no monetary limit, while rent and property schedules do. That describes the form, not the duty to deduct. If you have withheld tax on a VDA purchase, no minimum applies below which you can skip filing it.
Who Actually Files It: You or the Exchange?
On a regular Indian exchange order book, the exchange generally handles withholding. CBDT’s Circular 13 of 2022, issued on 22 June 2022, set out how exchanges and brokers deduct on trades they execute, and allowed an exchange to withhold on both legs of a swap under a written agreement with the user. It also said TDS is calculated on the amount net of GST and the deductor’s own charges.
Peer-to-peer deals sit outside most of that guidance. The circular’s exchange rules do not cover P2P transfers, which fall back on the main section, per BDO’s summary of the circular. In practice that means the buyer is the deductor. The Form 141 FAQs say the same thing in plainer words: the person who deducts, including a VDA buyer, files the form.
| Situation | Who withholds the 1% | How it is reported |
|---|---|---|
| Trade on an Indian exchange’s order book | Exchange or broker, per CBDT Circular 13/2022 | The exchange’s own TDS statements |
| P2P purchase from a resident seller | Buyer | Form 141, Schedule D |
| Crypto swapped for crypto, off-exchange | Each side is a buyer, so each ensures tax is paid before release | Form 141, Schedule D |
| Payment to a non-resident seller | Payer, under the non-resident provisions | Not Form 141 |
The last row matters for anyone buying from an overseas counterparty. The department’s VDA taxation note puts payments to non-residents under the old Section 195 route rather than the 1% resident regime.
How to File Form 141 for a Crypto Purchase
The department’s FAQs describe the mechanics. We have not filed one ourselves, so treat the order below as a summary of the official answers rather than a screen-by-screen guide.
- Log in with your PAN: a TAN is not required. An authorised representative can file the original statement, but only through the e-filing portal.
- Pick Schedule D: it covers transfers of virtual digital assets under serial number 8(vi).
- Group by month: several VDA purchases deducted in the same month can go on one form. Purchases deducted in different months need separate forms.
- Split joint purchases: where more than one person is buying, each deductor files a separate form for their share.
- Pay as you submit: payment is made online along with the form. You get an acknowledgement number (ARN) on submission and a Challan Identification Number (CIN) once payment goes through.
- Issue the certificate: download Form 132 from TRACES and give it to the seller.
Get the seller’s PAN right before you pay. An invalid or wrong PAN means the seller gets no credit in their Annual Tax Statement, and you may have to deduct at a higher rate. Mistakes in any schedule can be fixed with a correction statement within two years from the end of the tax year in which the statement was due.
A Worked Example With Real Dates
Take a hypothetical salaried buyer in Pune with no business income. On 12 May 2026 she buys USDT worth ₹2,00,000 from a resident seller through a P2P listing, her first VDA purchase of tax year 2026-27. If the stablecoin itself is new to you, our explainer on stablecoin depegs covers how USDT holds its value. We checked the arithmetic in Python.
| Step | Figure |
|---|---|
| Consideration agreed | ₹2,00,000 |
| Threshold for this buyer | ₹50,000 a year, crossed by this deal |
| TDS at 1% | ₹2,000 |
| Amount paid to the seller | ₹1,98,000 |
| Month of deduction | May 2026 |
| Form 141 due (30 days from 31 May) | 30 June 2026 |
Suppose she files on 15 July instead. That is 15 days late. Section 427 charges ₹200 for every day the failure continues, which would come to ₹3,000, but the fee cannot exceed the tax deductible. Her late fee is therefore ₹2,000. Interest for late deduction or payment is a separate charge under section 398(3)(a), the FAQs note, and comes on top.
| Filing date | Days late | Fee at ₹200 a day | Fee actually payable |
|---|---|---|---|
| 30 June 2026 | 0 | ₹0 | ₹0 |
| 5 July 2026 | 5 | ₹1,000 | ₹1,000 |
| 15 July 2026 | 15 | ₹3,000 | ₹2,000 (capped) |
Now the seller’s side. If the seller had bought that USDT for ₹1,90,000, the gain is ₹10,000. Income from transferring VDAs is taxed at a flat 30% plus surcharge and cess, with only the cost of acquisition deductible and no set-off of losses, according to the department’s VDA note. That is ₹3,000 before surcharge and cess. The ₹2,000 withheld shows up as a credit against it once the buyer’s filing is processed. Notice that the TDS is charged on the full ₹2,00,000 sale value, not the ₹10,000 profit, which is why active P2P sellers often find far more tax withheld than they finally owe.
Mistakes P2P Buyers Make
Assuming the Platform Took Care of It
An escrow-style P2P marketplace is not the same as an exchange matching orders. Unless the platform confirms in writing that it withholds on your trade, assume the obligation is yours.
Looking for Form 26QE
Form 141 applies to transactions from tax year 2026-27 onwards. Purchases made before 1 April 2026 stay with the old Act’s forms. Mixing them up creates a mismatch the seller will notice when their tax credit fails to appear.
Combining Months on One Form
Two purchases in May can share a form. One in May and one in June cannot, and each carries its own 30-day clock.
Forgetting the Reporting Trail
Separately from TDS, the law requires specified reporting entities to report crypto-asset transactions to the department, a duty that dates from Section 285BAA. A purchase you never filed TDS on may still be visible to the tax department from the other end. For more on how crypto is taxed and regulated, see our crypto coverage.
This article is for information and education only and is not investment, tax or financial advice. Figures were checked on 28 October 2026; confirm current details with the official source or a registered adviser before acting.
FAQ
Has Form 26QE Been Replaced?
Yes, for transactions from tax year 2026-27. Form 141, Schedule D, now carries TDS on VDA transfers along with the old 26QB, 26QC and 26QD payments.
Do I Need a TAN to File Form 141?
No. You file with your PAN on the e-filing portal.
What Is the Due Date for Crypto TDS Under Form 141?
Within 30 days from the end of the month in which you deducted the tax. A deduction in May is due by 30 June.
Is TDS on Crypto Still 1% Under the New Income-Tax Act?
Yes. Section 393(1), Table serial number 8(vi), keeps the rate at 1% of the consideration for transfer of a virtual digital asset.
What Is the Penalty for Filing Form 141 Late?
A fee of ₹200 a day under section 427, capped at the TDS amount, plus interest under section 398(3)(a) for late deduction or payment.
Which Certificate Does the Seller Get?
Form 132, which the buyer downloads from TRACES and passes on.
Sources
- Income Tax Department: Form 141 FAQs
- Income Tax Department: Section 393, Income-tax Act, 2025
- Income Tax Department: Section 427, Income-tax Act, 2025
- Income Tax Department: Section 194S, Income-tax Act, 1961
- Income Tax Department: Taxation of Virtual Digital Assets
- BDO India: CBDT guidelines on VDA tax withholding (Circular 13 of 2022)
