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Virtual Digital Asset (VDA/Crypto) Compliance Checklist — Sec 115BBH, 194S

Sec 115BBH flat-rate taxation with no loss set-off, and Sec 194S TDS on VDA transfer — a compliance checklist for an entity holding, trading, or facilitating transactions in cryptocurrency or other virtual digital assets.

Free · CORAA original — SA-aligned
Updated 28 Jul 2026
Tax rate
Sec 115BBH — flat rate, cost of acquisition only deduction
Loss set-off
Prohibited — no inter-VDA or inter-head set-off
TDS
Sec 194S — 1%, subject to threshold
Format
Microsoft Word (.docx)
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What’s inside

An excerpt from the template.

VIRTUAL DIGITAL ASSET (VDA) COMPLIANCE CHECKLIST

Entity: ___ · Year ended: ___

Purpose: test compliance with Sec 115BBH (flat-rate tax on VDA transfer income, no loss set-off) and Sec 194S (TDS on VDA transfer) for an entity holding, trading, or facilitating transactions in virtual digital assets.

A. Section 115BBH — taxation of VDA income

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About this template

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This template follows the format published by the Institute of Chartered Accountants of India (ICAI) in the AASB Audit Working Paper Templates (June 2023), the authoritative reference for Indian statutory-audit documentation. Fill in your firm’s letterhead and the engagement details on the form above, click Download Word file, and you’ll get a fully formatted .docx ready to use.

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Common questions

FAQs.

Can a loss on one cryptocurrency offset a gain on another?
No. Sec 115BBH computes income from transfer of each VDA separately, and expressly prohibits setting off a loss from one VDA against income from transfer of any other VDA, or against income under any other head — a stricter rule than the general capital-loss set-off provisions elsewhere in the Act. The loss also cannot be carried forward to a later year.
What deductions are allowed when computing VDA transfer income?
Only the cost of acquisition of the VDA. No deduction is permitted for any other expenditure or allowance — this rules out costs like transaction/exchange fees, internet or infrastructure costs, or any other expense connected with the transfer, unlike the broader deduction rules available for other capital gains.
Who deducts TDS under Section 194S when a transaction goes through an exchange?
This depends on the transaction structure and has been the subject of specific CBDT clarification — broadly, where the exchange itself owns the VDA being transferred it is treated as the seller for TDS purposes, but arrangements vary by platform. Verify the specific exchange's published TDS-compliance mechanism and any applicable CBDT circular rather than assuming the buyer always deducts.
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