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CMA Final · Direct Tax Laws and International Taxation · E-commerce Transaction and Liability in Special Cases

Under the Income-tax Act, 2025, an e-commerce operator facilitates a sale which is also a transfer of a virtual digital asset (so both Sl. No. 8(v) and 8(vi) of section 393(1) apply). The sale consideration is Rs 10,00,000, and the participant is a resident. How much tax is deducted?

Tax of Rs 10,000 is deducted. When a transaction falls under both the e-commerce provision and the virtual digital asset provision, tax is deducted only under the virtual digital asset provision at 1%, not at the 0.1% e-commerce rate and not cumulatively.

  1. ARs 1,000, being 0.1% under Sl. No. 8(v)
  2. BRs 10,000, being 1% under Sl. No. 8(vi) onlyCorrect
  3. CRs 11,000, being both 0.1% and 1% combined
  4. DRs 1,00,000, being 10%

Explanation

Note 4 states that where both 8(v) and 8(vi) apply, tax is deducted only under 8(vi), irrespective of Note 3. The rate under 8(vi) is 1%, so tax = 1% x 10,00,000 = Rs 10,000. Option A applies the wrong provision, and option C wrongly adds both.

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