The income tax department said that 1% TDS on transfer of virtual digital assets would be levied on net transaction value and the onus of deducting the tax would primarily be on the exchanges. The CBDT issued an FAQ on the TDS provisions on virtual digital assets (VDAs), or cryptocurrencies, which was introduced in the Budget and will be effective from July 1.The FAQ said, in a peer-to-peer transaction, the buyer paying the consideration will be required to deduct the TDS. However, in case the transaction is taking place through an exchange, the onus of deducting TDS will be on the exchange, which is crediting or making payment to the seller. In case the credit/payment between exchange and the seller is through a broker (and the broker is not seller), there has to be a written agreement that the broker would be deducting the tax. The FAQ further said for transfer of VDAs owned by the exchanges, the buyer or his/her broker would be required to deduct the tax. It also clarified that the TDS will be on the 'net' consideration after excluding GST/charges levied by the deductor for rendering the service. Commenting on the FAQ, AKM Global tax partner said, broadly, the responsibility to deduct TDS has been put on the exchanges, which will increase the regulatory and compliance burden for them.