How To Download And Fill Form 26Q and Form 26QE For TDS On Crypto Transactions?

Form 26Q is a statement containing details of TDS deducted on payments made under a particular TDS section except for salary payments; this needs to be filed quarterly by the person responsible for the deduction. But form 26QE is Challan-Cum-Statement used to report TDS deducted under section 194S by specified persons. Filed within 30 days from the end of the month in which TDS is deducted, Individuals or organisations must fill out TDS forms as per their eligibility for each financial year..

In this guide, we will explore the Form 26Q and Form 26QE, its significance and the procedures for filing.

What is Form 26Q?

Form 26Q is a statement of Tax Deducted At Source filled by the TDS deductor. This statement shows the payment made by the deductor to resident individuals and entities and the TDS amount deducted on those payments at a specified rate as per the Income Tax Act. The deductor fills this statement quarterly for TDS deducted on non-salary payments made to residents.

The tax deducted at source under Sections 193, 194, 194A, 194B, 194BB, 194C, 194D, 194EE, 194F, 194G, 194H, 194I,194J and 194T of the Income Tax Act of 1961 are to be filed by the depositor by submitting Form 26Q.  

It is to be noted that Form-26Q for  TDS reporting related to non-salary and payment made to residents only, where Form-27Q is for non-resident payments, Form-24Q is for reporting TDS deducted on salary payments, and Form 27EQ is for TCS transactions.

Note: If you want to download Form 26QE, follow the same steps but choose Form 26QE. 

How to Download Form 26Q from TRACES?

Here are the steps to follow for form 26Q download:

1. First, you need to visit the official website of TRACES (https://www.tdscpc.gov.in/app/login.xhtml).
2. Enter your User ID, password, and TAN (for deductors) to log in.
3. Navigate to the ‘Downloads’ tab and select e-TCS or e-TDS from the drop-down menu.
4. Next, select the ‘Quarterly Returns’ option and click on ‘Regular’.
5. You will be redirected to a new page where you can view the ‘Form’ section.
6. Select form 26Q from this section and click on download.

Note: If you want to download form 26QE, follow the same steps but choose form number 26QE.

What is the Use of Form 26Q?

Form 26Q is used for the following purposes:

• You need to submit form 26Q for TDS on all payments other than salary.
• Income from professional fees, interest on securities, director’s remuneration, dividend securities, etc., is eligible for tax deduction at source under form 26Q.
• Deductors must submit form 26Q quarterly, and the tax deducted would be applicable as per sections 193, 194, and 200 (3) of the Income Tax Act.
• Non-government deductors must quote their PAN, and government deductors must quote ‘PANNOTREQD’ while filing form 26Q.

How to File Form 26Q?

Here are the steps to file TDS return form 26Q:

Step 1: Login to e-filing portal using your TAN and password.

Step 2: Click on 'e-file>Income Tax Forms > File Income Tax Forms.

Step 3: Click on 'File Now' for filing of Quarterly TDS Return.

Step 4: Click on 'Let's get started'.

Step 5: Select the Form type, Financial Year, Quarter and Upload type. Attach the Zip file and proceed for E-verification.

Step 6: Click ‘Yes’ for confirming for E-verification.

Step 7: Complete the e-verification and submit the form using any method which is available.

Note: You can find the required section codes in the table below the form.

Form 26Q Sample Download

Form 26Q includes four sections and an annexure. 

• The first part asks for the TAN, PAN, financial year, and type of deductor. 
• You need to fill in the deductor’s details and the details of the person responsible for the tax deduction in the second section and third sections. 
• The fourth section asks for the details of tax paid and deducted. 
• And finally, the fifth or annexure section asks for the deductee’s details.

Part 1 and 2:

Part 3:

Part 4:

Annexure:

What is Form 26QE? 

Form 26QE is Challan-Cum-Statement used for depositing TDS deducted by specified persons under section 194S respecting the transfer of Virtual Digital Assets (VDA's) of the Income Tax Act. Under this section, any Indian resident transferring cryptocurrency or any other virtual digital asset, like NFTs, is eligible for a TDS deduction of 1%. 

Form 26QE should be filled within 30 days from the end of the month in which TDS was deducted. It is to be noted that this form is filed by specified persons. If the transfer value is Rs. 50,000 or more, the threshold limit for Specified persons is Rs. 10,000 or more, and for other persons, it is Rs. 10,000 or more.

If TDS is deducted under section 194S by someone other than the specified person, Form 26QF or 26Q shall be filed quarterly if the threshold limit is Rs. 10,000 or more.

Specific Person Under section 194S

1. An individual or Hindu Undivided Family (HUF) whose total sales/gross receipts/turnover from business does not exceed ₹ 1 crore in the financial year immediately preceding the financial year in which VDA is transferred or whose turnover from profession does not exceed ₹ 50 lakhs in the preceding financial year. 
2. A person with no income under the head "Profits and Gains of Business or Profession" (i.e., salaried individuals, pensioners, etc.).

When Form 26QE is Required to File

If a person responsible for the deduction of tax under Section 194S, he can submit Form 26QE by stating his PAN and is not required to obtain and quote TAN, only if he is an individual or HUF and carrying on a business or profession whose revenue does not exceed Rs 1 crore or Rs 50 lakhs respectively or if he doesn’t have income from business or profession.

If the person is not covered by above, then he needs to submit the TDS return via Form 26Q by obtaining the TAN.

How To Download Form 26QE? 

You can download Form 26QE on the Income Tax portal by following the exact steps mentioned above. All you have to do is choose form 26QE while downloading. 

What is the Use of Form 26QE? 

Form 26QE acts as a challan-cum-statement of TDS as per Section 194S. Issued to crypto users by the Income Tax Department of India, this form serves as a receipt or statement for the TDS deducted. The due date to furnish Form 26QE is within 30 days from the last day of the month during which the TDS was deducted. 

In terms of usefulness, this form serves the dual purpose of acting as a statement for crypto transactions as well as a challan for both the deductor and the deductee. 

How to File Form 26QE?

Here are the steps to follow while filing Form 26QE:

Step 1: Login to the income tax e-filing portal.

Step 2: Select the “e-Pay Tax” option from the e-file option.

Step 3: Click on New Payment.

Step 4: Find Form 26QD from the options and click on ‘Proceed’.

Step 5: You must fill in all required details in the given form. The following details need to be filled out in Form 26QD:

• Deductor’s full name and complete address with PIN
• Deductor’s mobile number and email ID
• Aadhaar number or PAN of the deductor
• Deductee’s name, address, mobile number and email ID
• Aadhaar number or PAN of the deductee
• Deductee’s PAN category and status
• The financial year for filing TDS
• Nature of payment
• Date of contract or agreement
• Amount paid or credited
• Date of payment or credit
• Whether nil or lower deduction u/s 197 is applicable
• Number of certificates issued u/s 197
• Aggregate of payment/credit during the period from 1st April to the end of the month in which the payment has been made /credited 
• TDS rate
• Date of TDS deduction
• Mode of payment
• Date of TDS deposit
• Details of TDS payment (amount, interest, fee, total payment)

Step 6: Click on ‘Submit’ to file Form 26QD.

Step 7: Click on ‘Continue’ after filing all the details.

Step 8: Select the mode of payment from the given options, such as net banking, debit card, pay at bank counter, RTGS/NEFT and payment gateway including UPI and credit card.

Step 9: Click on ‘Continue’ after selecting the payment mode.

Step 10: Select the option ‘Pay Now’ you will be redirected to the payment gateway of the mode of payment that you selected.

Step 11: After making the payment, you will be redirected to the e-filing portal. From there, you can download the challan-cum-return statement.

Form 26QE Sample Download

As mentioned earlier, Form 26QE is a challan-cum statement of the tax deducted at source under Section 194S. This form contains the details of deductee, deductor, and VDA transactions as well.

Final Word

Now that you know how to download and file Form 26Q, you can deposit TDS accordingly. Moreover, if you are conducting transactions of any kind related to VDA, you need to file Form 26QE for TDS returns..