The taxation framework for Virtual Digital Assets (VDAs)—including cryptocurrencies and NFTs—has undergone a structural shift with the introduction of the Income-tax Act, 2025. One of the most significant compliance changes is the migration from Form 26QE to Form No. 141 (Schedule D) for reporting TDS on VDA transactions.
This is not merely a change in form numbers—it represents a transition to a more integrated, PAN-based compliance system.
Whenever a person pays consideration for the transfer of a Virtual Digital Asset, and TDS is applicable, compliance does not end with deduction and payment. The law mandates filing a challan-cum-statement with the Income-tax Department.
Under the new regime, this requirement is fulfilled through:
Form No. 141 – Schedule D Applicable specifically for VDA transactions (crypto, NFTs, etc.)
As per guidance issued by the Central Board of Direct Taxes, Schedule D is exclusively meant for reporting TDS on VDA transfers.
Until 31 March 2026, the compliance framework operated under:
Key Features:
From 1 April 2026, the framework shifts to:
Key Features:
| Particulars | Up to 31.03.2026 | From 01.04.2026 |
|---|---|---|
| Section | 194S | 393(1) |
| Statement | Form 26QE | Form 141 (Schedule D) |
| Certificate | Form 16E | Form 132 |
| Filing Nature | Challan-cum-statement | Same (but unified) |
The determining factor is:
➡️ Earlier of credit or payment
You must file Form No. 141 – Schedule D if:
Includes:
A separate compliance mechanism applies where transactions are conducted through VDA exchanges.
Exchange Route:
Buyer Route:
👉 If the exchange assumes TDS responsibility, the buyer does NOT file Form 141.
| Aspect | Exchange Route | Buyer Deduction Route |
|---|---|---|
| Responsible Person | Exchange | Buyer/Payer |
| Form | Form 142 | Form 141 (Schedule D) |
| Frequency | Quarterly | Transaction-based (within 30 days) |
| Scope | Bulk transaction reporting | Single transaction reporting |
In Form 141 – Schedule D:
In Form 142 (Exchange):
If you are liable to deduct TDS:
Step 1: Deduct TDS
At prescribed rates under Section 393(1)
Step 2: File Form 141
Step 3: Deposit Tax
Step 4: Issue Certificate
Step 5: Handle Defaults (if any)
❌ No.
This is a standalone challan-cum-statement system, not part of regular TDS returns (like 26Q).
There is some inconsistency in official guidance:
👉 Conservative approach:
If TDS is applicable, comply and file Form 141—do not rely on threshold ambiguity.
The new VDA compliance regime introduces a streamlined but stricter reporting framework:
👉 The shift ensures better tracking, integration, and transparency in VDA transactions.
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